As US companies invest billions, Southeast Asia is becoming a key battleground for the future of AI, data centers, and digital services.

Southeast Asia, long seen as a tech backwater, is rapidly emerging as a key player in the global technology sector. Major tech leaders, including Tim Cook of Apple, Satya Nadella of Microsoft, and Jensen Huang of Nvidia, have recently visited the region, announcing billions of dollars in investments and discussing opportunities with national leaders. Amazon, for example, unveiled a US$9 billion investment plan in Singapore, garnering enthusiastic responses from local audiences.

With a population of approximately 675 million people, Southeast Asia is becoming a prime target for tech investment, especially as companies seek alternatives to China and India. The region offers a youthful, tech-savvy population, a business-friendly environment, and a growing talent pool, making it an attractive base for everything from data centers to AI research.

Historically overlooked in favor of China and Japan, Southeast Asia is now seeing increasing investments in digital infrastructure, spurred by the rising demand for online services, video streaming, and generative AI. For instance, major companies are projected to invest up to US$60 billion in data centers over the next few years to support this digital transformation. This surge is further driven by the region’s growing middle class, which is expected to make up 65% of the population by 2030, increasing the market for internet-based services to US$600 billion.

In recent visits, Tim Cook has focused on expanding Apple’s footprint in Southeast Asia. During his tour of Vietnam, Indonesia, and Singapore, Cook met with national leaders and local influencers to discuss potential investments. Apple also announced its record revenue in Indonesia, signaling the company’s increasing focus on the region as a new growth market.

Microsoft’s Nadella also toured Malaysia, Indonesia, and Thailand, reinforcing the company’s commitment to expanding its cloud and AI services in Southeast Asia. As competition in the US tech market slows, the region is gaining attention as a major frontier for the future of artificial intelligence. AI adoption is expected to add US$1 trillion to the region’s economy by 2030, with demand for AI-driven data centers set to soar.

Southeast Asia is already attracting significant investments in AI infrastructure, with Nvidia setting up a US$4.3 billion AI data center in Malaysia’s Johor Bahru region. The company is also exploring potential investments in Vietnam, with CEO Jensen Huang recently visiting the country.

Despite the region’s promise, challenges remain. Southeast Asia is politically and culturally diverse, with each country presenting unique hurdles for global firms. These include navigating local work cultures, managing currency volatility, and adapting to regulatory differences. However, the region’s relatively low-cost yet skilled workforce, along with government-led initiatives to boost AI training, makes it an attractive destination for companies seeking to develop cutting-edge technologies like large language models.

As tech giants continue to pour resources into Southeast Asia, the region is set to become a central hub for the future of the digital economy.