Building a digital nexus
09 Sep 2024
In May, Microsoft announced a US$2.2 billion (RM9.5 billion) investment — the largest in its 32-year history in Malaysia — to establish new cloud and artificial intelligence (AI) infrastructure. This commitment not only reinforces Microsoft’s position in the region but also supports Malaysia’s broader digital transformation, according to Andrew Lau, business programme director of cloud and digital transformation at Microsoft Malaysia Sdn Bhd.
Lau says the investment has enhanced Microsoft Malaysia’s existing “Bersama Malaysia” initiative. The initiative was established in 2021 to empower the country’s digital economy. Part of its plan was to establish Microsoft’s first data centre in the country to deliver cloud services locally.
“The US$2.2 billion is seen as a continued investment to build data centres, fuel cloud and AI innovation, and upskill talent,” says Lau.
In 2021, Microsoft announced plans to upskill an additional one million Malaysians by the end of 2023 to create economic opportunities for people and businesses in the digital era.
The company exceeded these numbers in 2023, says Lau, successfully upskilling 1.5 million Malaysians through various programmes and projects in collaboration with industry players.
“For instance, we work with academic institutions and specific non-governmental organisations to help women upskill with coding and AI studies, all as part of our pathway towards the current workforce,” he says.
“We also collaborated with Universiti Teknologi Malaysia’s (UTM) recently established AI Faculty in terms of AI programmes and student empowerment.”
The company offers online courses such as Code Without Barriers and Skills for Jobs to help women break into the growing cloud, AI and digital technology sectors. These programmes are designed to close the gender gap and contribute to a more inclusive economy.
Additionally, the explosion of data centres is expected to create 32,000 job opportunities, including 60 to 70 specialised professional roles such as AI experts and cybersecurity professionals, which will significantly impact the country’s economy.
“We have engaged research agencies like the International Data Corp (IDC) and found that the multiplier effect of bringing a data centre is estimated to generate about US$8.8 billion in economic impact for the country. This impact cannot be achieved by Microsoft alone; it requires the collaboration of various parties, including the government, our customers and stakeholders,” says Lau.
Strengthening partnerships
Leveraging strong partnerships and the government’s blueprints as guiding principles, Lau shares that Microsoft is committed to enhancing the nation’s digital ecosystem through various initiatives.
One key initiative is the establishment of a National Artificial Intelligence Centre of Excellence (CoE) in collaboration with agencies like the Ministry of Digital. This CoE aims to drive AI adoption across key industries.
“We are looking into the AI CoE from various dimensions, including the upskilling and trust elements. When deploying AI, it is important to ensure we are using AI for good and it is trusted by society. Some guardrails need to be put in place and we are working with government agencies to ensure there are proper AI policies in place and how we can support Malaysia in this as well,” says Lau.
Other projects where the tech giant is pioneering AI adoption in the public sector include a collaboration with the Ministry of Investment, Trade and Industry (Miti) to better analyse the economic trajectories of different negotiating partners during international trade negotiations.
Another key initiative involves Cradle, an agency under Malaysia’s Ministry of Science, Technology and Innovation. Cradle is leveraging Azure OpenAI Service to develop a virtual information assistant for its MYStartup platform, the “Single Window” to Malaysia’s start-up ecosystem, which was recently launched at the KL20 Summit.
The company will also collaborate with the National Cyber Security Agency of Malaysia (Nacsa) through the Perisai Siber (Cyber Shield) initiative to enhance the country’s cybersecurity capabilities, according to reports.
This collaboration will focus on promoting security and resilience in the public sector through security assessments and capacity building.
Through this initiative, Microsoft aims to support Nacsa in its role as Malaysia’s lead agency for cybersecurity matters, particularly as it formulates the next stage of the nation’s cybersecurity strategy. The two organisations will also explore deeper collaborations in developing cybersecurity skills through initiatives such as Microsoft’s Ready4AI&Security programme.
“Generally, we work across ministries and this is important because, with government agencies and ministries focusing on this space, leadership, collaboration and expertise are needed to advance the country’s aspirations of becoming a digital hub,” Lau says.
The data centre destination
As Malaysia becomes a hotspot for data centres, Johor is emerging as a major player in this space, largely due to its proximity to Singapore. Microsoft is also joining the fray by acquiring land in Johor to build its data centre.
“A lot has been said about the lifting of the moratorium [on data centres] in Singapore. This is something we can potentially tap into, particularly in terms of expertise or technology transfer. For now, we are monitoring the space and looking for opportunities to align with these developments,” says Lau.
In January 2022, the Singaporean government lifted the moratorium on data centres which had been in place since 2019 due to concerns over their significant energy consumption. As Singapore’s data centre market begins to expand again, Johor’s growing data centre industry is well-positioned to absorb the anticipated overspill from its neighbouring city state.
Hence, Microsoft is set to build a data centre in Eco World’s industrial park following its commitment to develop cloud computing and AI services in Malaysia.
Reports state that Eco World has sold a parcel of land in Johor to a local Microsoft subsidiary which plans to develop a data centre on the site. This transaction is part of a broader trend, with Malaysia increasingly emerging as a hub for data centre activity this year.
The undeveloped land, located in Eco Business Park VI in Senai, Kulai District, just north of Johor, was acquired for US$85.2 million.
Microsoft Payment (Malaysia), a wholly-owned subsidiary of Microsoft Ireland Operations Ltd, has strategically acquired four parcels of land totalling 85.37 acres in Johor from Crescendo Corp Bhd (KL:CRESNDO) for RM447.64 million since November last year.
Eco World noted that the proceeds from this sale will contribute to the company’s cash reserves, which will be used for new land bank acquisitions.
The real estate firm stated in June that the presence of an internationally recognised technology leader establishing a sizable data centre in the area is expected to drive demand for other industrial products in Eco Business Park VI.
While the details are still being finalised, Lau says the data centre region’s cloud services availability will be disclosed by the end of the year or early next year, once all arrangements are in place.
Focusing on sustainability
Data centres consume substantial amounts of electricity to operate their servers, cooling systems, networking equipment and other infrastructure.
Acknowledging that data centres are significant energy consumers, Lau says the company has made commitments to achieve the nation’s net-zero target by 2030. “Data centres take up a lot of energy. We have made a very strong statement to say that by 2030 the company will achieve net zero and completely shift to renewable energy by 2025. Our data centres will achieve net zero, whether through the use of renewable energy or offsetting our carbon emissions.”
Microsoft has made a global commitment to transition to 100% renewable energy sources by 2025. This means that all of Microsoft’s data centres, buildings and campuses, including the planned Malaysia data centre region, will have power purchase agreements for green energy that cover 100% of their carbon-emitting electricity consumption.
Lau suggests that Malaysia can learn from the experiences of other Microsoft data centres around the world.
“By examining the practices and strategies implemented in these existing facilities, Malaysia can gain valuable insights into how to effectively manage its upcoming data centres,” he adds.
For instance, the company has pledged to attain zero waste by 2030 and to ensure proper circulation of electronic waste (e-waste) that comes from its data centre regions.
He notes that data centres contribute a significant amount of e-waste and there are a few ways the company is looking to reduce this.
“Data centres often handle a massive influx of signals to maintain and operate their devices. When a device malfunctions, we use AI technology to identify and isolate the issue. We then bring the device to our dedicated circular centres for repair or recycling, contributing to our sustainability efforts,” he adds.
He adds that these circular centres focus on extending the lifespan of circuit boards. By using advanced technologies, they have increased the operational life of the data centre devices from four to six years. Lau assures that this effort has not only reduced waste but also contributed to a more sustainable future.
“We prioritise sustainability by focusing on reducing our operational carbon footprint. Our commitment to achieving carbon negativity by 2030 is central to our comprehensive decarbonisation strategy and our data centres play a crucial role in this effort.”
Source: The Edge Malaysia
