Scrutinizing Amazon’s and Tesla’s Malaysian deals

Dan Lain-Lain (Malay for “and others”) is a weekly column by TIA journalist Emmanuel Samarathisa that dissects the goings-on in the Malaysia tech scene but with a heavy mix of current affairs, policy and politics. Click here to read past articles.

Last week, two names got many Malaysians excited: Tesla and Amazon. Why? Because, at least according to the government, both tech titans are going to invest in the country one way or another.

Photo credit: Amazon

Even Prime Minister Anwar Ibrahim told the parliament’s lower house on Tuesday that Amazon and Tesla’s commitment was due to his five-month-old government.

Yes, I kid you not. Two capitalistic titans needed a fledgling administration made up of a pact of strange bedfellows to convince them to invest in Malaysia – at least that’s what the PM said.

Sadly there won’t be any fact-checking exercises here. So, Anwar wins.

Briefly, Amazon said on March 2 that it will commit US$6 billion until 2037. Part of its investments include establishing data centers in Malaysia to host cloud services and applications.

Tesla, on the other hand, will be setting up a sales and service office, allowing Malaysians to directly buy electric cars instead of relying on gray market imports.

The company will also build a network of electric car superchargers, too.

A laggard

Let’s put both firms in perspective. In the case of Amazon, we’re late to the game.

The online retail giant has invested US$6.1 billion in Singapore since 2010. In 2021, it pledged to allocate US$5 billion for Indonesia. And last year, the firm increased investments in Thailand by US$5 billion for a 15-year period.

Other countries, on the other hand, are throwing larger baits to entice Tesla. Indonesia, for example, wants the company to build a so-called gigafactory to produce electric vehicles (EVs). In return, the country is offering up a precious resource to make EV batteries: nickel.

Taken together, Tesla and Amazon’s commitment to Malaysia doesn’t seem much – at least not as substantial as the politicians are hyping it up to be. I can’t comment on Tesla, nor this will be commentary on how un-climate-friendly nickel-mining is.

But I have covered data centers for a bit and here’s what needs to be said: Execution is easier said than done.

Systemic issues still left untouched