Kuala Lumpur, November 5, 2025 — Microsoft has announced plans to establish its second cloud region in Malaysia, named Southeast Asia 3, as part of its US$2.2 billion investment plan to expand digital infrastructure and advance AI innovation across Southeast Asia.
Unveiled at the Microsoft AI Tour Kuala Lumpur, the new cloud region—located in Johor Baru—will be integrated with Microsoft’s global Azure backbone network of subsea and terrestrial fibre, complementing the existing Malaysia West region, which began operations in May with three hyperscale data centres in Kuala Lumpur.
Designed as a next-generation cloud region, Southeast Asia 3 will enable scalable AI adoption, advanced workload support, and sustainable operations. Microsoft revealed that the site will utilize closed-loop chip-level cooling to achieve zero-water evaporation, significantly reducing water consumption. In addition, renewable biofuel-powered backup generators will minimize carbon emissions, aligning with Microsoft’s broader sustainability goals.
Beyond infrastructure, the project includes community initiatives aimed at building digital skills, entrepreneurship resources, and environmental programs such as clean water access and mangrove restoration. The effort complements Microsoft’s AI for Malaysia’s Future (AIForMYFuture) program, which has already trained over 734,000 Malaysians in AI-related competencies, and its BINA AI Malaysia initiative that promotes AI talent development and innovation through collaborations with EY, PETRONAS Leadership Centre, and the National AI Office (NAIO).
“Our expanded investment reflects Microsoft’s commitment to helping governments, businesses, and communities innovate responsibly, build with confidence, and accelerate their AI transformation journey,” said Judson Althoff, CEO of Microsoft’s Commercial Organization.
Laurence Si, Managing Director of Microsoft Malaysia, added: “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.”
