By Mike Cherney


SYDNEY--Microsoft said it will make its largest-ever single investment in Australia and expand its cloud computing and AI infrastructure in the country while partnering with the Australian intelligence agency in charge of cybersecurity.

Microsoft, which timed the announcement to coincide with Australian Prime Minister Anthony Albanese's U.S. visit, said it will invest 5 billion Australian dollars (US$3.16 billion) over the next two years. It said the investment will grow its local data-center footprint from 20 sites to 29 sites spread across Canberra, Melbourne and Sydney.

The U.S. tech giant also said it will collaborate with the Australian Signals Directorate in an initiative to improve protection from cyber threats for Australian residents, businesses and government entities. Microsoft said it will work with the agency to build next-generation cybersecurity solutions.

Microsoft said the digital-infrastructure investment will more than triple its computing capacity over the next two years, enabling the company to meet the growing demand for cloud-computing services. It will also work to create a new data-center academy in the country to help train technicians, IT operations personnel and others.

"This is our largest investment in Microsoft's 40-year history in Australia and a testament to our commitment to the country's growth and prosperity in the AI era," said Brad Smith, Microsoft's vice chair and president.

The government partnership followed concerns among cybersecurity professionals globally that cyberattacks are rising and stretching resources. Australian companies and government agencies have been targeted in high-profile incidents, including some last year on telecom provider Optus and health insurer Medibank.

In 2020, Australian officials said businesses and government agencies were being targeted by a sophisticated state actor in a large-scale cyberattack--with some analysts saying that China was one of the few countries that could pull off such an attack. A 2019 incident targeted computer systems in the country's parliament. China has in the past denied being responsible for cyber incidents.

The U.S. and Australia have been ramping up their security cooperation in recent years. The Aukus agreement between the U.S., Australia and the U.K. calls for the three countries to cooperate on future technologies such as cyber capabilities, artificial intelligence and quantum computing, and more conventional military hardware like submarines.


Write to Mike Cherney at mike.cherney@wsj.com


(END) Dow Jones Newswires

10-23-23 0914ET