The tech giant's chief executive Satya Nadella is on a three-nation tour of Southeast Asia -- Indonesia, Thailand and Malaysia -- to announce a range of investments in data centres, AI and cloud services.
"Today, Microsoft announced it will invest $2.2 billion over the next four years to support Malaysia's digital transformation -- the single largest investment in its 32-year history in the country," it said in a statement released as Nadella gave a keynote speech in Kuala Lumpur.
It said the cash would help to build AI and cloud infrastructure in Malaysia, creating an AI centre of excellence and giving AI training to as many as 200,000 Malaysians.
"We are committed to supporting Malaysia's AI transformation and ensure it benefits all Malaysians," Nadella said in the statement.
"Our investments in digital infrastructure and skilling will help Malaysian businesses, communities, and developers apply the latest technology to drive inclusive economic growth and innovation across the country."
He also confirmed the investment in his keynote speech, saying he was "really pleased" to announce the expansion.
"We really want to make sure that we have world-class infrastructure right here in the country so that every organisation, every software developer, every start-up, can use it to really not only to build for this country, but for the world and the region," he told the crowd.
Malaysian Prime Minister Anwar Ibrahim welcomed the pledge, calling it proof of confidence in the "investor-friendliness and political stability" of the country.
"These investments... will be a major backbone to the government's focus on developing AI capacity in the country," he wrote on his Facebook page.
The announcement comes after tech chief Nadella unveiled a $1.7 bn investment in Indonesia, as well as Thailand's first data centre region this week to boost cloud and AI infrastructure.
Research by global consulting firm Kearney showed AI was poised to contribute $1 trillion to Southeast Asia's gross domestic product by 2030, with Malaysia predicted to see more than a tenth of that, the statement said.
Microsoft began its operations in Malaysia in 1992, according to its official website, and now employs more than 200 employees across its offices in Kuala Lumpur and in northern Penang state.
The company has been hugely rewarded by investors since it aggressively pushed into rolling out generative AI, starting with its $13 billion partnership with OpenAI, the creator of ChatGPT, in 2023.
Nadella said last week sales in January-March rose 17 percent on-year to $61.9 billion, with net profit up 20 percent to $21.9 billion.
The embrace of AI has boosted sales of Microsoft's key cloud services such as Azure, which have become the core of its business under Nadella's leadership.
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