Charting big tech’s $70b spending spree in Southeast Asia

A whirlwind tour of Malaysia, Singapore, and Vietnam all in less than a week.

Sounds like the tour schedule of BTS or another K-pop supergroup? Well, this was the trip taken by Nvidia co-founder and CEO Jensen Huang in Southeast Asia late last year to discuss investment deals for the chipmaker in the region.

Huang looks every bit the rockstar in his trademark leather jacket, even autographing bras along the way. While his peers like Apple CEO Tim Cook and Microsoft CEO Satya Nadella may have less star power, they’ve also visited the region in the past 18 months and committed huge amounts of investment.

From AI chip factories to data centers and electric vehicle plants, some of the world’s biggest tech firms have agreed to a flurry of investments in Southeast Asia in the last year and a half. The region’s tech talent, abundant natural resources for industries like EVs, and growing consumer markets all appear to have played a role in drawing this attention.

While a non-exhaustive list, a Tech in Asia analysis of various media reports reveals that since the start of 2023, global tech majors have committed to investing US$69.3 billion in Malaysia, Singapore, Indonesia, Thailand, and Vietnam.

Malaysia alone has received commitments of at least US$32.9 billion. That includes US$10 billion for an auto-making hub from Chinese EV maker Geely, US$4.3 billion for a joint project between local conglomerate YTL Power and Nvidia for AI development, and US$2 billion from Google for a data center and the development of a “cloud region.”

Singapore has also received commitments totaling US$16.9 billion, which includes US$7.8 billion for a chip factory from Netherlands-based NXP Semiconductors and Vanguard International Semiconductor Corporation, a subsidiary of Taiwan Semiconductor Manufacturing Company.

By the numbers

Unsurprisingly, investments related to artificial intelligence have made up the lion’s share of commitments from global tech majors over the past 18 months. If investments into data centers, cloud tech, and AI chip manufacturing are counted in one bucket, the total amounts to US$55.3 billion.

The region’s AI market size has been tipped to be worth more than US$30 billion by 2030, surging from US$6.7 billion this year. No wonder global players are trying to lay the foundations to grab a slice of that pie.

In terms of which companies have made the most commitments, Amazon Web Services has agreed to stump up a hefty US$22.6 billion, including US$6 billion for cloud infrastructure in Malaysia.

All that glitters isn’t gold

It is important to note, however, that these deals are commitments rather than concrete investments. Some were signed as memorandums of understanding, which don’t always translate into deals.