Tech, why people are investing in ASEAN

Gregory B. Poling and Japhet Quitzon's analysis for the Center for Strategic and International Studies

The 10 members of the Association of Southeast Asian Nations (ASEAN) constitute the fastest growing online market in the world, with 125,000 new Internet users per day. U.S. tech giants are aware of the strategic importance of Southeast Asia and are strengthening their presence in the region with large investments pledged by Apple, Microsoft and Amazon in recent weeks. 

In mid-April, Apple CEO Tim Cook made a trip to Vietnam, Indonesia and Singapore. He announced a planned $250 million expansion of the company's Singapore campus, which will reportedly focus on artificial intelligence. Cook also said Apple plans to increase investment in Vietnam and explore manufacturing opportunities in Indonesia.

Shortly thereafter, Microsoft CEO Satya Nadella visited Indonesia, Malaysia, and Thailand from April 30 to May 2. On his first stop in Jakarta, he announced plans to invest $1.7 billion over four years in cloud and AI architectures in Indonesia, the largest investment in the company's 29 years in the country. The next day he said Microsoft will open its first data center in Thailand, based on an agreement with the Thai government to provide cloud and AI infrastructure. 

Nadella then traveled to Malaysia, where he announced plans to invest $2.2 billion in cloud computing and artificial intelligence infrastructure over the next four years. Microsoft will work with the Malaysian government to enhance its cybersecurity capabilities and provide artificial intelligence training to 200,000 people in the country. Nadella also said Microsoft is committed to providing artificial intelligence skills training to 2.5 million people throughout the region, particularly in Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

Finally, on May 7, Amazon Web Services (AWS) committed $9 billion to expand its cloud infrastructure in Singapore. The investments will go toward building, operating and maintaining data centers in the city-state over the next five years. Like Microsoft, AWS is working with the Singapore government to create a program for 5,000 people a year to expand research and development capabilities.

U.S. technology companies are betting big on the future digital economies of Southeast Asia. In doing so, they will boost regional economies and their own profits. They will also seek to shape rules on data governance and AI as regional governments grapple with the digital future, including competing visions championed by China, Europe and the United States.