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View all search resultsAI boom: Can Indonesia move from market to maker?
Indonesia has the scale to drive AI demand, but without an urgent policy pivot into tech manufacturing and infrastructure, it risks becoming just a lucrative consumer market while its neighbors capture the real value.
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A group of people visit the facilities of the DayOne data center at Nongsa Digital Park (NDP) in Batam, the Riau Islands, on July 20, 2026. (JP/Fadli)
C
oreWeave’s plan to build three data centers in Indonesia signals that the global artificial intelligence boom is reaching Southeast Asia’s largest economy.
With over 280 million people and a thriving digital market, the country will have no shortage of demand for AI. The real challenge is whether it can capture the value this technology creates rather than simply consuming tools developed abroad.
The AI expansion is reshaping global trade, investment and growth, but the gains will not be spread evenly. For countries that import costly chips and cloud services without generating tech exports of their own, AI could widen the trade deficit, putting long-term pressure on current accounts and local currencies like the rupiah.
Across Asia, economies with established tech manufacturing are already cashing in. In mid-2026, South Korea saw surging export growth fueled by semiconductors, while Malaysia posted strong gains driven by electronics manufacturing and data center expansions, and Vietnam continues to climb into the chip supply chain on the back of its deep electronics base.
Crucially, while these nations buy advanced tech, they also earn substantial foreign exchange by building and exporting it.
World Bank data highlights a stark contrast. High-tech products make up roughly 60 percent of manufactured exports in Singapore and Malaysia, around 44 percent in Vietnam and 36 percent in South Korea.
In Indonesia, that figure sat at just 8.7 percent in 2024, lower than it was a decade earlier.
