Microsoft announces first data centre investment in Thailand

Microsoft‘s announcement of its inaugural investment in a data centre region in Thailand is likely to boost the country’s digital ecosystem and potentially stoke competition within the data centre sector. The news came as part of a tour by Microsoft Chairman and CEO, Satya Nadella, who visited Indonesia, Thailand, and Malaysia to unveil a series of investments in data centres, artificial intelligence (AI), and cloud services.

Microsoft’s commitments to Thailand include the establishment of a new data centre region, which was announced during Microsoft Build: AI Day in Bangkok on May 1. The tech giant also pledged to offer AI training opportunities to more than 100,000 Thais, aiming to support the nation’s burgeoning developer community. These commitments extend on Microsoft’s previous memorandum of understanding with the Thai government, which sought to envision the country’s digital-first, AI-driven future.

The value of Microsoft’s investment in Thailand’s data centre region was not revealed by Nadella. Talks between the company and Thailand only commenced late last year, according to Digital Economy and Society Minister Prasert Jantararuangtong, hence it may be premature for the company to specify an investment figure.

Microsoft plans to further the growth of the Thai developer community through initiatives like AI Odyssey, which aims to train 6,000 Thai developers to become AI subject matter experts. Meanwhile, K-Research predicts that Thailand’s data centre service business will grow by 31.2% annually.

Microsoft views Thailand as a rapidly expanding market on GitHub, its software development, collaboration, and innovation platform. Over 900,000 Thailand-based developers used GitHub in 2023, marking a 24% year-on-year growth. Microsoft Thailand’s Managing Director, Dhanawat Suthumpun, expressed that the company has seen a consistent growth in demand for services such as cloud and AI from organisations of varying sizes and scales in Thailand, spanning both the private and public sectors.

The planned data centre region in Thailand is set to increase the availability of Microsoft’s hyperscale cloud services, thereby ensuring enterprise-grade reliability, performance, and compliance with data residency and privacy standards. Research by Kearney suggests that AI could contribute nearly US$ 1 trillion to Southeast Asia’s GDP by 2030, with Thailand set to capture US$117 billion of this sum.

Data centre

The entry of major foreign cloud providers with local data centres is anticipated to have a positive impact on the Thai digital ecosystem, according to Adam Simmons, an analyst at Dgtl Infra. He believes their presence will enable Thai startups and enterprises to access cutting-edge cloud services and tools, thereby contributing to the digital upskilling of the workforce.

Simmons also noted that Asia-Pacific, including Thailand, has become a hotspot for hyperscale data centre investments in recent years due to rapid digital transformation, growing demand for cloud services, and increasing adoption of generative AI technologies. Thailand’s strategic geographic location, bolstered by its supportive government policies and infrastructure investments, makes it a prime candidate for such investments, reported Bangkok Post.

In terms of future prospects, Simmons estimates that the total value of data centre investments in Thailand will reach roughly 110 billion baht ($US 3 billion) by the end of 2024, growing to 225 billion by 2027, marking a 27% compound annual growth rate.