Kuala Lumpur, 4 November 2025 – Microsoft is sharing new details about its upcoming cloud region in Johor Bahru, Malaysia, known as Southeast Asia 3. This strategic investment is aimed at accelerating AI Transformation across Southeast Asia, meet growing demand for trusted cloud services, and drive long-term economic growth, while reinforcing Malaysia’s regional leadership in the digital economy.
When this next-generation cloud region comes online, it will deliver Microsoft’s most comprehensive and strategic cloud services, designed to support advanced workloads and evolving customer needs from across the region.
YB Gobind Singh Deo, Malaysia’s Minister of Digital, said, “This milestone underscores Malaysia’s continued progress in the digital economy. We are pleased to collaborate with the industry and Microsoft as a trusted technology partner in building Malaysia’s leadership as a secure and reliable location for digital assets of organizations across the region.”
Judson Althoff, CEO of Microsoft’s Commercial Organization, said at the AI Tour in Kuala Lumpur, “Southeast Asia is one of the most dynamic regions in the world. Our expanded investment reflects Microsoft’s commitment to helping governments, businesses, and communities innovate responsibly, build with confidence, and accelerate their AI Transformation journey—empowering organizations to emerge as Frontier firms.”
The Southeast Asia 3 region will add to Microsoft Azure’s more than 70 global regions. Earlier this year, Microsoft announced the general availability of its new Malaysia West cloud region in Greater Kuala Lumpur, empowering organizations in Malaysia to accelerate their AI journey. There are real economic and social benefits the Microsoft Cloud brings to Malaysia, helping unlock real innovation in the country.
Building responsibly for community and
sustainability
Microsoft is committed to building and operating datacenters responsibly, creating meaningful benefits for its local communities. Guided by its global Datacenter Community Pledge, the initiatives in Johor Bahru include:
Skills2Work Datacenter Foundations Program (the Program): Microsoft, in collaboration with The Asia Foundation and Universiti Teknologi Malaysia (Johor Bahru), developed the Program to enhance employability and introduce participants to career opportunities in the datacenter industry. Over 12 months, the program will equip 150 recent graduates with hands-on training, industry exposure, and job readiness support – building a pipeline of skilled talent to support Malaysia’s growing digital infrastructure.
Social entrepreneurship: Through collaboration with UNDP Malaysia and BPEN Johor, Microsoft is training 200 trainers from 20 social enterprises, empowering approximately 10,000 community members with the skills, networks, and support needed to enhance their social and economic impact.
Renewable energy: The upcoming Southeast Asia 3 cloud region will feature backup generators powered by renewable biofuel to reduce net carbon emissions whilst supporting Malaysia’s sustainability goals.
Water-efficient cooling: The upcoming cloud region is designed to achieve zero-water evaporation for cooling by adopting chip-level cooling solution through a closed loop. This approach will continually circulate water between servers and chillers, eliminating the need for a continuous fresh water supply. As a result, ongoing water consumption will be significantly reduced, supporting ultra-low Water Usage Effectiveness (WUE).
Clean water access: Microsoft is working with CLEAN International and Water Watch Penang, with support from Jabatan Pelajaran Negeri Johor to install rainwater harvesting systems in 42 Johor schools, benefiting over 20,000 people and conserve a total of 8.4 million liters of water annually. These systems provide sustainable water sources for sanitation, hygiene, and maintenance, while also offering training on conservation and system upkeep.
Mangrove restoration: Microsoft is partnering with Belia Prihatin and WWF Malaysia, to lead a three-year ecological restoration project in Kampung Sungai Melayu and Perapat River in Johor, promoting sustainable fisheries, eco-tourism, and environmental education.
Embracing Malaysia’s journey to Becoming
Frontier
With Southeast Asia 3 laying the foundations for scalable AI adoption, Microsoft is enabling more businesses to evolve into becoming Frontier – empowering human ambition and finding AI-first differentiation. These firms are maximizing their impact and creating value in new ways.
While many organizations are still in the early stages of this journey, others have progressed to more collaborative models where humans and AI agents work together toward shared goals. We’re seeing this play out across several organizations in Malaysia:
AFFIN Group became the first bank in Asia Pacific to go live with a digital core banking platform running on Microsoft Azure. Built on a cloud-native foundation, this milestone positions AFFIN at the forefront of innovation, enabling greater agility, security, and personalized services at scale.
PETRONAS envisions a future where AI is deeply embedded in the fabric of the organisation – powering decisions, accelerating innovation, and driving sustainable growth. By empowering its people with AI, PETRONAS is building the foundation for transformative impact. Through this collaboration and broader joint efforts, the organisation looks forward to advancing its AI journey and fostering innovation ecosystems with like-minded partners for a more sustainable future.
RHB Bank is leveraging Azure OpenAI, integrated within Microsoft Teams, to streamline processes and support innovation across functions. The bilingual solution, available in English and Bahasa Malaysia, enables employees to retrieve information quickly and accurately, enhancing operational efficiency while adhering to robust security protocols. This contributes to a more seamless and responsive banking experience for customers.
Empowering Malaysians with AI skills through AIForMYFuture
To ensure inclusive transformation, Microsoft continues to invest in skilling through AI for Malaysia’s Future (AIForMYFuture), a national initiative aimed at equipping 800,000 Malaysians with AI-related skills by the end of 2025. As of October 2025, more than 734,000 individuals have been skilled across the government, large and small-medium corporations, startups, education institutions, underserved communities, as well as the general workforce.
(Photo above) Laurence Si, Managing Director, Microsoft Malaysia, at the Microsoft AI Tour Kuala Lumpur on November 4, 2025 in Kuala Lumpur, Malaysia.
Laurence Si, Managing Director, Microsoft Malaysia, said, “As a trusted technology partner to Malaysia for over 33 years, Microsoft is committed to empowering the nation’s workforce with the skills needed to thrive in the AI economy. Through AIForMYFuture, we are working with the government, industry, and communities to ensure every Malaysian is equipped with the skills to thrive in the AI economy.
“Additionally, the upcoming Southeast Asia 3 cloud region reinforces Microsoft’s continued commitment to deliver secure, resilient, and scalable cloud services that will accelerate innovation and strengthen Malaysia’s position as a regional digital leader,” he added.
Building an AI-powered foundation for inclusive growth
In May, Microsoft unveiled BINA AI Malaysia to accelerate the nation’s AI transformation. A key initiative under BINA AI Malaysia is the Microsoft National AI Innovation Center (NAIC), set up in partnership with EY in Malaysia, the National AI Office (NAIO), and the PETRONAS Leadership Centre.
As part of this broader effort, Microsoft is collaborating with various partners to deploy AI solutions nationwide. One such initiative involves Microsoft and EY working with the Employees Provident Fund (EPF) to jointly build an AI-powered platform to enhance financial literacy and retirement planning for its 16 million members. The solution – when deployed at scale – is designed to streamline frontline operations through automation and on-demand insights, improving efficiency and overall member engagement.
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