Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry.
Thailand had an "incredible opportunity to build a digital-first, AI-powered future", Microsoft chairman and CEO Satya Nadella said in Bangkok.
Data centre regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms.
"Our new datacenter region, along with the investments we are making in cloud and AI infrastructure, as well as AI skilling, build on our long-standing commitment to the country," Nadella said.
Microsoft added in a statement that their investment would provide AI training "to benefit more than 100,000 individuals in Thailand", supporting the country's growing developer community.
The global embrace of AI has boosted sales of Microsoft's key cloud services such as Azure, which have become the core of its business under Nadella's leadership.
Nadella said that the "full Azure region" was going to come to Thailand.
Nadella is due to meet with Prime Minister Srettha Thavisin, who has pushed digital infrastructure and cloud investments.
Thailand's Office of the National Digital Economy and Society Commission has said the digital economy could contribute as much as 30 percent of GDP by 2027.
Srettha has undertaken numerous international tours in the past year as he attempts to woo investors, meeting with Microsoft, Google, and Tesla boss Elon Musk.
Thailand is the latest stop on Nadella's high-profile regional tour.
He was in Indonesia on Tuesday, where he pledged to invest $1.7 billion around AI and cloud computing, and will later jet to Malaysia.
Microsoft has been rewarded by investors since it aggressively rolled out generative AI, starting with its $13 billion partnership with OpenAI, the creator of ChatGPT, in 2023.
The partnership propelled it past Apple as the world's biggest company by market capitalisation.
bur-rbu/pjm
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