As the archipelago’s digital economy approaches the US$100 billion mark to become the largest in Southeast Asia, the demand for computing capacity grows in tandem. Coordinating Economy Minister Airlangga Hartarto views this relationship as integral to the national economic growth agenda. 

"Indonesia aims for growth exceeding 8 percent, and the digital economy is a key driver of this. AI is central to that, and AI can only exist if the underlying infrastructure, specifically data centers, is robust."

The government has recorded interest in additional data center investments totaling approximately 1.3 gigawatts (GW), with a value reaching $15 billion–20 billion. In addition, the associated activities generate demand for construction, energy, networking, technology, maintenance and skilled labor, while simultaneously expanding economic activity and the state revenue base. 

An example of how data centers can serve as broader economic drivers can be seen in Chile, where AWS’ investment of over $4 billion in three data centers is projected by the Chilean government to contribute approximately $10 billion to its GDP and support more than 7,000 full-time jobs annually. 

ITB researcher Reini D. Wirahadikusumah sees data center development as an important part of Indonesia’s digital growth, while emphasizing the need to plan strategically and ensure sufficient resources to support it. “Energy and AI technology will serve as crucial pillars of development. Indeed, AI itself requires immense amounts of energy to operate.”

Against this backdrop, Deputy Communications and Digital Minister Nezar Patria sees an opportunity to challenge Indonesia’s long-standing position as merely a market for technological development.

"We do not want to be just a market or a consumer. We aim to secure a strategic position within the global AI industry value chain," Nezar said.

This urgency is particularly evident as Southeast Asian countries compete to build the infrastructure needed to capture the next wave of digital growth. World Bank data from the first half of 2025 shows Indonesia’s total data center capacity at approximately 1.17 GW, compared with 3.17 GW in Malaysia and 1.25 GW in Singapore. CSIS Indonesia projects Indonesia’s capacity could grow by 16.8 percent annually through 2029, reaching approximately 1.41 GW.

Ultimately, Indonesia possesses strong assets for building AI capacity: a vast digital market, growing computational needs and significant energy resource potential. The challenge lies in transforming these advantages into efficient and sustainable AI capacity, ensuring that incoming investments generate greater value for the Indonesian economy.

Popular

Public health measures urged amid El Niño's extreme heat

Trade surplus grows in August on higher manufacturing exports

A ministry restored