27/02/2026

BIZ & FINANCE FRIDAY | FEB 27, 2026

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Data centre boom in Southeast Asia

“So we support all of those.” Microsoft recently signed a deal with Indonesia’s state-owned electricity provider to raise the nation’s renewable energy capacity by around 200 megawatts over a decade. Microsoft’s rivals Amazon and Google, as well as Chinese tech giants Alibaba and Tencent, also run data centres in the Jakarta region. The metropolitan area of 42 million is sinking, partly due to groundwater extraction. Officials plan to eventually relocate the capital. The data centre boom “will put even greater strain on the region’s water resources, which have historically been overexploited and badly managed”, said scientist Olivia Jensen from the National University of Singapore. Microsoft projects water consumption will grow until 2028 before stabilising at 660 million litres the year after as the company adds more closed-loop systems. “We’re evolving fast, and what we’re building now will consume zero water on a daily basis,” Walsh said. As AI technology develops apace, the company has swathes of land reserved on its Jakarta site for future builds. But next-generation systems will likely require more computing power, Ghi warned. “If these things get larger and larger and more thirsty, then something has to give,” Ghi said. – AFP

o Facilities offer economic benefits but place pressure on power grids and water resources

JAKARTA: Nonstop buzzing fills a windowless Microsoft data centre near Jakarta, part of a tech construction boom sweeping Southeast Asia that promises economic opportunities but is also hungry for resources. As demand for artificial intelligence heats up, technology giants are racing to invest billions of dollars in the region, attracted by a growing plugged-in user base. New data centres – warehouse-like facilities that store online files and power AI tools from chatbots to image generators – are mushrooming worldwide, and the sector is growing particularly fast in Asia. AFP was recently granted rare access to a Microsoft data centre in Indonesia that is part of the new boom. No company logo was visible on the vast boxy exterior of the centre, and visitors were only admitted after careful security checks. Keeping the systems whirring is a constant operation, with technicians on site even during religious holidays. Data centre capacity in Southeast Asia is projected to triple from 2025 levels by 2030, driven by a tenfold surge in AI use, according to a KPMG report. “We expect every app, every workload, every user to be using AI in

some part of their workflow” in just a few years, Alistair Speirs, a manager for infrastructure at Microsoft, told AFP. But many of Asia’s data centres will add demand to grids still heavily reliant on planet-warming fossil fuels. And to keep servers from overheating, they will place new pressure on often-stretched local water supplies. At the Indonesian data centre, racks of metal-cased servers in tall white cabinets were busy answering AI queries for local users – an intensive, heat-generating process. A “closed-loop” water cooling system, which works a bit like a car radiator and does not require regular refills, prevents them from malfunctioning. Higher performance chips “require a lot more intensity”, Noelle Walsh, head of the company’s cloud operations, told AFP. “We’ve had to adapt our data centres’ designs to accommodate different power structures and different cooling mechanisms.” Super-connected Singapore was long Southeast Asia’s data centre hotspot, but the city state halted developments between 2019 and 2022 over energy, water and land use worries. That, along with an explosion of AI

The Microsoft data centre under construction in Karawang, West Java. – AFPPIC

will likely quadruple by 2030, according to energy think tank Ember. Microsoft’s Jakarta facilities, spread out to mitigate risks from earthquakes and floods, are part of a US$1.7 billion investment with a potential “hyperscale” capacity that would need hundreds of megawatts of electricity. The company says it works to “green” local grids by incentivising energy transition plans. “We don’t build power plants, but we work with utility providers,” Microsoft’s Walsh said. “In some parts of the world it is wind power, in other parts of the world it is solar, we also use hydropower, and in some countries it’s nuclear.

interest after ChatGPT’s debut, brought a surge of data centres to Malaysia, and increasingly Thailand, Indonesia, the Philippines and Vietnam. “The boom is there,” with companies racing for “first-player advantage”, said Trung Ghi of the consulting firm Arthur D. Little. Hosting data centres is a “win-win situation” for governments, he said, noting it boosts business efficiency with faster online tools and grows local economies as people come to work at new tech parks. The data centre expansion will increase demand on power grids that are still heavily coal dependent. Power consumption by data centres in Indonesia – where coal generates nearly 70% of electricity –

Grab bets on AI and new services to triple profit by 2028

HSBC kicks off Singapore insurance business sale, eyes US$1b value: Sources

HONG KONG: HSBC has started the sale process for its Singapore life insurance product manufacturing business with the hiring of an adviser, and is hoping for the deal to be valued at more than US$1 billion (RM3.89 billion), said three sources with knowledge of the matter. The bank, which makes the bulk of its revenues and profits in Asia, has hired JPMorgan as its adviser, said two of the sources, who declined to be named as they were not authorised to speak to the media. HSBC has started engaging with potential buyers including Japanese insurers Nippon Life and Dai-ichi Life, and non-binding bids for the business could be expected in a month, said one of the sources. HSBC, JPMorgan, Dai-ichi Life and Nippon Life declined to comment on the potential sale of the Singapore insurance manufacturing business. HSBC’s plan to divest its Singapore life insurance manufacturing business comes as the London-based

then distributes them via its retail banking network, digital channels and private banking relationships. It has a separate business that sells policies of other insurers. In 2025, revenue from the bank’s insurance manufacturing operations reached US$2.3 billion, HSBC said in its annual results. On the bank’s 2025 earnings call on Wednesday, Elhedery said the Singapore insurance business was under strategic review but no decision had been made. “The reason we decided to put this business under strategic review is because we’re not in the top five in the life business in Singapore, and therefore our ambition is always to be as a leader in what we do, or let others do it better than us and not be there,” he said. HSBC’s insurance franchise, at which global revenue grew 36% in 2025 to US$2.6 billion from a year earlier, is one of the fastest-expanding segments among the bank’s fee-based businesses as it seeks to increase wealth income. – Reuters

bank pushes to simplify itself and exit areas that are not viewed as adding value. Since assuming his position a year and a half ago, CEO Georges Elhedery has shaken HSBC up by revamping divisions along East-West lines, shedding sub-scale investment banking units in the US and Europe and slashing the ranks of senior managers. In total, the bank initiated 11 exits from various businesses across the globe last year. The bank is only seeking to sell the insurance manufacturing operations in Singapore, the sources said, not the entire insurance business, which means it will continue to distribute insurance products to investors in the market. The valuation expectations of more than US$1 billion for HSBC’s Singapore insurance product manufacturing business could change depending on potential bidder interest, one of the sources said. At the insurance manufacturing business, the bank creates products and

SINGAPORE: Southeast Asia’s top ride-hailing and delivery firm, Grab, is betting on artificial intelligence and expansion of new services such as online groceries and financial products to triple profit by 2028, the company’s president told Reuters. Grab has set goals for the next three years of growing revenue by more than 20% each year and tripling EBITDA to US$1.5 billion (RM5.8 billion) in 2028 from last year’s level, president and chief operating officer Alex Hungate said in an interview at the company’s Singapore headquarters. Ride-hailing in Southeast Asia has shifted from subsidy-fuelled expansion to a profitability push, as companies contend with rising operating costs while looking to AI-optimised super apps to monetise bundling rides with deliveries and financial services. Nasdaq-listed Grab earlier this month announced its first-ever full-year net profit with its 2025 results, 14 years after it was founded and following billions of dollars in fundraising. However, the company’s

Grab has taken “toeholds” Asia, including its acquisition in US wealth platform Stash, he added. Hungate said Grab’s “first and best” use of cash is reinvesting in Southeast Asia to drive organic growth, although the company is open to select acquisitions. He said there are no plans currently for a second listing, and there was “no update” on media reports concerning a potential merger with smaller Indonesian rival GoTo. Grab is exploring building AI agents to foster loyalty, with automated assistants for drivers and merchants, Hungate added. Even as Grab works with foundational model providers such as OpenAI, Hungate said the company would prefer to use their technology to build its own agents rather than integrating with popular chatbots such as ChatGPT. “We think that our brand and the frequency with which customers use us will mean that the agents that we deploy will be ones that do a better job for them,” he said. – Reuters outside Southeast

forecasts for 2026 revenue and adjusted EBITDA fell short of Wall Street estimates, sending shares lower. The stock is down more than 15% this year, while Uber is down 11% and Lyft is down 31%. In a research note this week, Huatai Securities said higher investment in autonomous vehicle partnerships and AI could weigh on profitability, and flagged risks including “slower than expected improvement in user penetration and macroeconomic volatility”. Grab aims to achieve its 2028 targets by getting more efficiency from its main app and delivery network, Hungate said. As users already use Grab frequently, it can bundle services such as mobility, food delivery and groceries at a lower cost, he added. The company, which operates in more than 900 cities across Southeast Asia, is also expanding its financial services offerings, and can use its data to underwrite loans more precisely than traditional banks typically can, according to Hungate.