The CEOs of Apple Inc., Microsoft Corp. and Nvidia Corp. are among the industry chieftains who’ve swung through the region in past months, committing billions of dollars in investment and holding forth with heads of state from Indonesia to Malaysia. Amazon.com Inc. just this week took over a giant conference hall in downtown Singapore to unfurl a $9 billion investment plan before a thousands-strong audience cheering and waving glow sticks.
After decades of playing second fiddle to China and Japan, the region of about 675 million people is drawing more tech investment than ever. For data centers alone, the world’s biggest companies are set to splurge up to $60 billion over the next few years as Southeast Asia’s young populations embrace video streaming, online shopping and generative AI.
Traditionally welcoming to Western investment, the region’s moment has arrived as China turns more hostile to US firms and India remains tougher to navigate politically. Silicon Valley is setting its sights on business-friendly regimes, fast-growing talent pool and rising incomes. The advent of AI is spurring tech leaders to pursue new sources of growth, laying the digital infrastructure of the region’s future.
“Countries like Singapore and Malaysia are largely neutral to the geopolitical tensions happening with China, US, Ukraine and Russia,” said Sean Lim, a managing partner at Singapore-based NWD Holdings, which invests in AI-based projects and other areas. “Especially with the ongoing wars, this region has become more attractive.”
Take Tim Cook and Satya Nadella, who last month embarked on their biggest tours across Southeast Asia in years. The investments they pledged are set to help turn the region into a major battleground between the likes of Amazon, Microsoft and Google in future frontiers such as artificial intelligence and the cloud.
The region’s growing workforce is making it a viable alternative to China as a center of talent to support companies’ global operations. As its governments pushed for improvements in education and infrastructure, it’s become an attractive base for everything from manufacturing and data centers to research and design.
“The governments are pro cross-border investments and there’s a deep talent pool,” said NWD’s Lim.
Southeast Asia has also become a sizeable market for gadgets and online services. About 65% of Southeast Asia will be middle class by 2030, with rising purchasing power, according to Singapore government estimates. That’ll help more than double the region’s market for internet-based services to $600 billion, according to estimates by Google, Temasek Holdings Pte and Bain & Co.
Apple, whose pricey gadgets for long remained out of reach for the vast majority in the region, is now adding stores. Chief Executive Officer Cook toured Vietnam, Indonesia and Singapore in late April, meeting prime ministers and announcing fresh investments as the company seeks new growth regions beyond China, where sales have sputtered.
In Jakarta, besides pow-wows with the country’s leadership, Cook met a local influencer with almost 800,000 Instagram followers over chicken satay, and learned enough of the local language to say “How are you” in a video circulated on social media. On his X account, local customers asked Cook for an Apple Store and better servicing of Apple products in the country. Following the trip, Apple reported its revenue in Indonesia had reached a record, even as total global sales declined.
“These are markets where our market share is low,” Cook said on a conference call last week. “The populations are large and growing. And our products are really making a lot of progress.”
Microsoft CEO Nadella also…
Read More: Apple, Microsoft and Nvidia are investing billions of dollars in Southeast Asia.