The Future of Microsoft Asia Region
I have been researching Microsoft's latest region strategy for a few months. I found something very interesting and it can change many things in the Asia & ASEAN region.
Where is the new headquarter of Asia & ASEAN region?
Someone may believe it is still China mainland because Microsoft invested a lot in China mainland. However, I have a different opinion. The new headquarter will be in Malaysia.
This is because US AI act prevents Microsoft from investing any infrastructure about AI in China mainland. And Azure means AI, which means almost any Azure team will not be located in China anymore. Currently, Azure Core team in MSFT is moving out of China mainland.
Microsoft Chairman and CEO Satya Nadella announces a $2.2 billion investment to advance new cloud and AI infrastructure in Malaysia during the Microsoft Build: AI Day on May 02, 2024 in Kuala Lumpur, Malaysia.
What is Microsot Malaysia doing?
I have noticed some interesting new opening positions of Microsoft Malaysia. A few senior support position are moving to Malaysia. These positions used to be hired in Wuxi/Suzhou, China. It’s just the beginning.
Firstly, MSFT moves support team to Malaysia. And then, move R&D team to Malaysia. Perhaps also marketing team such as Microsoft MVP team and Reactor team.
What will happen to Microsoft China
Microsoft China may cut headcount since Q2, 2025 or Q3, 2025 and even freeze the headcount (no new hiring). The strategy is to shrink the team in China mainland. No matter it’s support team, R&D team or sales team.
It will be a hard time for Microsoft China. Moreover, the sales amount will drop quickly because China is applying technical regulations to a few critical industries such as medical care, finance and aviation. Microsoft technologies used to be popular in these industries. But everything changed now. The Xinchuang policy has banned Microsoft technologies to be used in these industries, especially medical care.
However, moving team out of China has nothing bad for MSFT stock and its profits since Microsoft China only generates 1.5% of global sales amount and this number is dropping since late 2022. There is no reason MSFT should continue investing China mainland while China government doesn’t like this giant company at all.
