Microsoft has detailed its plans for a second cloud region in Malaysia.

Plans for the new region, located in Johor Bahru, comes just months after Microsoft launched its Kuala Lumpur cloud region.

The region will be known as Southeast Asia 3, and was first revealed by the company in October 2025. No timeline for launch was provided, though the company previously only confirmed two Asia regions would launch in 2026: India and Taiwan.

DCD has contacted Microsoft for further information.

Once developed, the data centers for the Johor region will use backup generators powered by renewable biofuel, and use zero-water evaporation for cooling by using a closed-loop chip-level cooling solution.

Microsoft has been steadily snapping up land in Johor over the last few years, acquiring more in January 2025 from Crescendo. The parcels are located in Pulai and the Nusa Cemerlang Industrial Park - though the latter deal isn't expected to close until 2027.

Microsoft is also working on various sustainability projects to compliment the new region.

These include working with CLEAN International and Water Watch Penang to install rainwater harvesting systems to conserve 8.4 million liters of water annually, as well as working on an ecological restoration project in Kampung Sungai Melayu and Perapat River in Johor with Belia Prihatin and WWF Malaysia.

YB Gobind Singh Deo, Malaysia’s Minister of Digital, said: “This milestone underscores Malaysia’s continued progress in the digital economy. We are pleased to collaborate with the industry and Microsoft as a trusted technology partner in building Malaysia’s leadership as a secure and reliable location for digital assets of organizations across the region.”

Judson Althoff, CEO of Microsoft’s commercial organization in the region, said at the AI Tour in Kuala Lumpur: “Southeast Asia is one of the most dynamic regions in the world. Our expanded investment reflects Microsoft’s commitment to helping governments, businesses, and communities innovate responsibly, build with confidence, and accelerate their AI Transformation journey - empowering organizations to emerge as Frontier firms.”

Microsoft first revealed its intention to enter Malaysia with a cloud region located in Kuala Lumpur in 2021. In 2024, the company committed to investing $2.2 billion in cloud computing and AI in Malaysia over the next four years. The Kuala Lumpur region launched in May 2025.

During Microsoft's Q1 2026 earnings call, CEO Satya Nadella noted that the company has "stood up" around 2GW of data center capacity in 2025 alone, and expects to double its data center footprint in the next two years. The company has also dramatically increased its data center leasing activities as well as data center construction, spending some $11.1bn on leasing data center space in the quarter.