Tencent Cloud plans to establish its first cloud region in Malaysia, while Alibaba Cloud has launched a third data centre in South Korea, adding capacity in two Asian markets as global cloud infrastructure spending continues to rise.

Both announcements were made on August 18. Tencent’s planned Malaysia region will comprise up to three availability zones in Johor.

Alibaba adds capacity in South Korea

Alibaba’s latest South Korean facility adds capacity to an existing local presence. The company entered the market in 2016 and opened its first data centre there in 2022, while the third facility comes little more than a year after its second data centre was added.

Alibaba has not disclosed the specific physical locations of its South Korean data centres. The latest facility will provide compute, storage, networking, security, and database services, alongside infrastructure and services for AI workloads.

Yongjoon Yoon, country manager of South Korea at Alibaba Cloud Intelligence, said the company has continued to invest in the market over the long term. “The third data centre is not merely an infrastructure expansion. It is an investment to help South Korean enterprises operate AI and cloud-based services more reliably,” Yoon said.

The expansion forms part of Alibaba’s three-year commitment to invest at least RMB380 billion, or about US$53 billion, in AI and cloud infrastructure. Alibaba has also recently added infrastructure in France, Japan, Malaysia, and Mexico.

The company now operates 104 availability zones across 30 regions globally.

Alibaba’s cloud business has also reported higher revenue as the company increases infrastructure spending. Alibaba Cloud Intelligence revenue increased 38% in its latest reported quarter, while AI products accounted for about 30% of external cloud revenue, according to figures reported by Reuters in May.

Alibaba said at the time that its AI infrastructure spending would exceed the RMB380 billion programme announced in 2025 as it continued to increase cloud computing capacity.

Tencent enters Malaysia’s cloud market

Tencent’s planned Malaysian cloud region will comprise up to three availability zones in Johor. The company said 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, said the company sees Malaysia as a potential hub for its Southeast Asian operations, citing the country’s technology infrastructure and talent base. “Malaysia remains a key market in Tencent Cloud’s growth strategy across Asia,” Zhao said.

At the time of the announcement, Tencent Cloud International said its infrastructure network covered 66 availability zones across 23 regions. The Malaysian region extends a regional footprint that already includes infrastructure in markets such as Singapore, Indonesia, and Thailand.

Nucky Fang, general manager of Tencent Cloud International and Tencent Cloud Malaysia, told The Edge Malaysia that the company had seen more opportunities in the country over the previous six months, particularly among banks, insurers, payment companies, and other large enterprises.

Johor has become one of Malaysia’s main centres for data-centre development. Reuters reported in July that the state had attracted about US$35 billion in investment.

JLL estimated that Johor’s planned data-centre capacity, including projects under construction and in the pipeline, could reach around 7GW, about eight times current levels.

The expansion has increased scrutiny of electricity and water use. Reuters reported that new projects must explain how they will source power, while Johor has restricted particularly water-intensive data-centre designs.

Malaysia’s investment authorities have also cited projections that electricity demand from data centres could exceed 5,000MW by 2035.

Tencent is entering a Malaysian cloud market where other hyperscalers already operate local infrastructure. AWS opened 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. AWS and Microsoft have cited local workload hosting and data residency among the reasons for establishing infrastructure in Malaysia.

South Korea adds AI computing capacity

Alibaba’s new facility is also being added as South Korea expands its domestic AI computing infrastructure. The country’s Ministry of Science and ICT broke ground on the National AI Computing Center in Haenam on August 3, with plans for the facility to house more than 15,000 AI chips by 2028.

The project is being developed through a public-private structure led by Samsung SDS, with participation from companies including Naver Cloud, Kakao, and KT.

Private-sector AI data-centre projects are also planned. Reuters reported in June that SK, GS Group, and Naver initially planned about 550 trillion won of investment in projects representing a combined 8.4GW of AI data-centre capacity, with construction targeted to begin by the first half of 2028.

The Tencent and Alibaba announcements come as global spending on cloud infrastructure services continues to increase. Synergy Research Group estimated that worldwide enterprise spending on cloud infrastructure services reached US$143.4 billion in the second quarter of 2026, up more than US$43 billion from a year earlier.

The 43% year-on-year increase was the highest growth rate recorded by Synergy in eight years. The research firm identified generative AI as the main driver of the increase and said generative AI-specific cloud services grew 165% year over year.

Malaysia was among the markets where cloud infrastructure spending grew at a rate above the worldwide average during the quarter, alongside India, Indonesia, Ireland, and Thailand, according to Synergy. The research firm did not provide a comparable figure for South Korea in its public Q2 data.

AWS, Microsoft, and Google still account for most global cloud infrastructure spending. Synergy estimated their Q2 2026 market shares at 28%, 20%, and 15%, respectively, while the three providers accounted for 67% of the public cloud market.

Citing Gartner’s 2025 IaaS market share report, Alibaba said its share of Asia-Pacific IaaS revenue reached 22.5% in 2025, up from 20.8% a year earlier, compared with a 7.7% worldwide share.

(Photo by Markus Stickling)

See also: IBM Cloud and Together AI expand AI infrastructure with NVIDIA

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