TikTok parent ByteDance set aside MYR10 billion ($2.13 billion) to establish Malaysia as an AI hub and boost the technology’s developments in the country, on top of an additional MYR1.5 billion investment targeting the expansion of its local data centres.

The news was announced by Malaysian trade minister Tengku Zafrul, who revealed the investment deal tailed a meeting with TikTok’s VP Helena Lersch during the latter’s visit to the country. Zafrul noted the meeting explored “the development of TikTok in Malaysia”, adding the social media app has built a data centre in the Malaysian state of Johor.

Zafrul explained ByteDance has proposed a major investment worth approximately MYR10 billion to assist AI developments and position Malaysia as Southeast Asia’s “AI hub”.

The official also added that “considering future needs, ByteDance intends to expand its data center facilities with an additional investment of MYR1.5 billion”.

Zafrul expects the fresh investments will “undoubtedly” aid Malaysia achieve its target of increasing its digital economy to 22.6 per cent of the country’s GDP by 2025.

Reuters noted that last month Google said it was planning a $2 billion investment to develop its first data centre and Google Cloud region in Malaysia, while Microsoft said it will invest $2.2 billion to expand cloud and AI services.

Elsewhere, the company’s video-sharing platform TikTok is facing mounting pressure over a potential US ban, which can happen if ByteDance refuses to sell its interest to a US entity.

Recently, Reuters reported TikTok is designing an algorithm tailored specifically to its US audience, noting the version of the technology can operate independently of China-based ByteDance.