Tencent Cloud is set to establish its first cloud region in Malaysia, while Alibaba Cloud has unveiled its third data centre in South Korea, expanding its presence in key Asian markets in response to the growing global demand for cloud infrastructure.
Both announcements were made on August 18. Tencent’s upcoming Malaysia region will feature up to three availability zones in Johor.
Alibaba’s new facility in South Korea builds on its existing local infrastructure, with the company entering the market in 2016 and opening its first data centre in 2022. The addition of the third facility comes just over a year after the second data centre was launched.
The specifics of Alibaba’s South Korean data centres have not been disclosed. The latest facility will offer a range of services including compute, storage, networking, security, and database services, as well as infrastructure for AI workloads.
Yongjoon Yoon, country manager of South Korea at Alibaba Cloud Intelligence, emphasized that the third data centre represents a long-term investment aimed at supporting South Korean enterprises in their adoption of AI and cloud-based services.
This expansion is part of Alibaba’s commitment to invest at least RMB380 billion in AI and cloud infrastructure over three years. The company has recently expanded its infrastructure in France, Japan, Malaysia, and Mexico, operating 104 availability zones across 30 regions globally.
Alibaba Cloud Intelligence revenue saw a 38% increase in its latest reported quarter, with AI products accounting for about 30% of external cloud revenue. Alibaba has indicated that its AI infrastructure spending will surpass the RMB380 billion program announced in 2025 to meet the growing demand for cloud computing capacity.
Tencent’s entry into the Malaysian cloud market marks a strategic move for the company, with plans to establish up to three availability zones in Johor. The local infrastructure will support AI workloads, data-heavy applications, and digital services used by Malaysian enterprises.
Bluefin Jiannan Zhao, vice president of Tencent Cloud and managing director of Tencent Cloud International for Asia Pacific, highlighted Malaysia’s potential as a hub for Tencent Cloud’s Southeast Asian operations, citing the country’s technology infrastructure and talent pool.
At the time of the announcement, Tencent Cloud International’s infrastructure network spanned 66 availability zones across 23 regions. The addition of the Malaysian region complements Tencent Cloud’s existing infrastructure in markets such as Singapore, Indonesia, and Thailand.
Nucky Fang, general manager of Tencent Cloud International and Tencent Cloud Malaysia, noted an increase in opportunities in Malaysia, particularly among banks, insurers, payment companies, and other large enterprises over the past six months.
Johor has emerged as a prominent hub for data centre development in Malaysia, attracting about US$35 billion in investment, according to a report by Reuters. JLL estimates that Johor’s planned data centre capacity could reach around 7GW, significantly higher than current levels.
The expansion of data centre facilities in Johor has raised concerns about electricity and water consumption. New projects are required to outline their power sourcing plans, and water-intensive data centre designs are subject to restrictions in Johor.
Malaysia’s investment authorities have projected that electricity demand from data centres could exceed 5,000MW by 2035.
Tencent’s entry into the Malaysian cloud market follows the presence of other hyperscalers in the region. AWS launched a three-zone Malaysia region in August 2024, while Microsoft’s three-zone Malaysia West region became generally available in May 2025.
Microsoft is also developing another cloud region in Johor Bahru, with both AWS and Microsoft citing local workload hosting and data residency as key factors driving their infrastructure investments in Malaysia.
In addition to the announcements by Tencent and Alibaba, South Korea is expanding its domestic AI computing infrastructure. The country’s Ministry of Science and ICT initiated the National AI Computing Center project in Haenam on August 3, aiming to accommodate over 15,000 AI chips by 2028.
The project involves a public-private collaboration led by Samsung SDS, with participation from companies such as Naver Cloud, Kakao, and KT. Private-sector AI data centre projects are also in the pipeline, with SK, GS Group, and Naver planning significant investments in projects totaling 8.4GW of AI data centre capacity.
The global spending on cloud infrastructure services continues to rise, with enterprise spending reaching US$143.4 billion in the second quarter of 2026, according to Synergy Research Group. The research firm noted a 43% year-on-year increase, driven by generative AI services that grew 165% year over year.
Cloud infrastructure spending in Malaysia outpaced the global average in the second quarter, along with markets such as India, Indonesia, Ireland, and Thailand. AWS, Microsoft, and Google remain dominant players in the global cloud infrastructure market, accounting for 67% of the public cloud market.
Alibaba’s share of Asia-Pacific IaaS revenue grew to 22.5% in 2025, up from 20.8% the previous year, according to Gartner’s 2025 IaaS market share report.
The developments in Malaysia and South Korea reflect the ongoing expansion and investment in cloud infrastructure to meet the growing demand for AI and cloud-based services worldwide.
