Google said on Wednesday that it will invest $15 billion in Malaysia over 2027 and 2028, according to Economic Times. The money will go into data centres and other infrastructure.
In a separate report, Economic Times said shares of Alphabet, Google's parent company, rallied nearly 5%. Both stories point to one theme. Google is spending huge sums on artificial intelligence (AI), and investors want to know if it will pay off.
What Google announced
Google said demand for AI services is booming. Data centres are large, warehouse-like buildings full of servers. These computers train and run AI tools such as chatbots and image generators.
The new plan builds on a $2 billion investment that Google announced in 2024. By our calculation, the new amount is 7.5 times that earlier figure.
Google said its campuses in Malaysian industrial zones will be "energy-efficient". It said it will work to support local water security and add more than one gigawatt of clean energy to the national grid. Once running, the sites are projected to sustain more than 9,000 local jobs a year. Wages there would average 45% above the national median, the company said.
Why Malaysia
Google called Malaysia one of Southeast Asia's most dynamic digital economies. It pointed to 99% internet penetration and fast AI use by government, businesses and consumers.
Malaysia is Southeast Asia's fastest-growing hub for new data centres. Market research firm DC Byte said it has more than half of the data centre capacity being built across Southeast Asian countries such as Indonesia, Thailand, the Philippines and Vietnam.
| Item | Figure | Who said it |
|---|---|---|
| New investment | $15 billion (2027 to 2028) | |
| Earlier investment | $2 billion (announced 2024) | |
| Local jobs expected | More than 9,000 a year | |
| Clean energy to be added | More than 1 gigawatt | |
| Malaysia's 2026 growth forecast | 5.2% | International Monetary Fund (IMF) |
| Data centres' share of energy use by 2035 | One-third (forecast) | Malaysia's deputy prime minister |
Most of these numbers are Google's own plans and projections. The growth and energy figures are forecasts made by others.
Why Alphabet shares rose
Economic Times linked the rally to changing expectations about US regulation and strong growth at Google Cloud. Cloud computing means renting computing power and storage over the internet. It is like taking electricity from the grid instead of running your own generator.
The same report said investors are also focused on Alphabet's massive spending on AI infrastructure, its rising debt and the long-term returns on these investments. So the share price rose, but the questions about cost remain.
Customer habits are changing too. A top executive at Google's cloud arm told Livemint that generative AI has led clients to seek shorter, more flexible deals with cloud providers. Fast change in AI makes long-term commitments to one provider less attractive, the executive said.
Cutting costs through voluntary buyouts
While Google spends on AI, it is trying to control other costs. Livemint, citing Reuters, said Google began offering voluntary exit packages in June to some staff in Canada, France, Germany, Japan and Switzerland. Similar offers had been made since last year in some divisions in the US and the UK.
In a voluntary exit, the employee chooses to leave in return for a payment. In a layoff, the company decides. In Switzerland, Google offered one month's salary for each year of service, capped at 12 months' salary, according to Reuters. Terms in the other four countries have not been disclosed.
Reuters could not find out how many employees accepted. Staff at Google Cloud and the AI unit DeepMind were left out of past offers. Chief Financial Officer Anat Ashkenazi has repeatedly named AI and cloud computing as key hiring priorities.
Other Google news to know
Schools: Google will switch off its AI tools for schoolchildren by default, Economic Times reported. Gemini, Gemini Notebook, Gemini in Classroom and Search will stay off for school student accounts until school administrators turn them on. The change starts in the US and will reach other countries later, but no date is set.
India: According to Inc42, which cited The Indian Express, the Centre is exploring whether to withdraw safe harbour protection from platforms such as YouTube, Facebook, Instagram and X. The talks are only exploratory and no decision has been taken. Any change would likely need amendments to the IT Act and approval from Parliament.
What it means for a small investor
Alphabet is listed in the US, not on Indian stock exchanges. Indian investors may still follow it through international funds or overseas investing routes.
The key lesson is simple. Big AI spending may build future business, but it raises costs and debt today. A one-day rise in the share price does not show whether that spending will earn enough later. Cloud growth, debt and cost control are the figures to track. Our results section explains how to read company numbers.
Google is not alone. Read how Meta plans to raise money through bonds, and how Happiest Minds said AI doubts are slowing client decisions.
Risks and what to watch
- Power and water: AI data centres use a lot of electricity and often water for cooling. Many grids still depend on fossil fuels.
- Local pushback: Economic Times said a worldwide backlash is growing over the environmental impact, noise, pollution and how many jobs such sites really create.
- Approvals: Malaysia's government said in July it would approve data centre projects only after making sure there is enough energy and water. In October, a Finnish authority ordered work on two Google data centre sites halted until environmental impact checks are done.
- Costs: Heavy AI spending and rising debt remain a worry for investors.
Watch for progress on the Malaysia plan, any update on how many staff took buyouts, and whether India's safe harbour talks become a formal proposal. For wider trends, visit our markets page.
Words explained
- Data centre: A large building full of computer servers. It stores data and runs online services and AI tools.
- Generative AI: A type of AI that creates new content, such as text or pictures, when a user asks.
- Cloud computing: Renting computing power and storage over the internet. Companies pay for what they use instead of buying machines.
- Gigawatt: A unit of electric power equal to 1,000 megawatts. It is used to measure big power plants.
- National median: The middle wage in a country. Half of workers earn more and half earn less.
- Voluntary exit programme: An offer that lets staff choose to leave a company in return for a payment, called severance.
- Safe harbour: A legal protection that keeps online platforms from being held responsible for what users post, if they follow certain rules.
Sources: Economic Times, Livemint, Inc42.
This article is for information and education only. It is not investment advice. MarketUpDown is not registered with SEBI as an investment adviser or research analyst. Read our disclaimer.