Jakarta, INTI - Artificial intelligence (AI) is expected to become a game changer in Indonesia’s economic transformation while creating opportunities for the emergence of new industries. One of the sectors benefiting most directly from the rapid development of AI is the data center industry.
Coordinating Minister for Economic Affairs Airlangga Hartarto said demand for data centers continues to grow alongside the rapid adoption of AI. This trend has prompted countries worldwide to expand data center capacity to support the growth of their digital economies.
“The key factors are land availability, electricity supply, and water availability. Indonesia is considered to meet these requirements, which is why the digital special economic zone in Bintan, which is already sold out, is now expanding,” Airlangga said at the BIG Downstream Insights 2026 event in Jakarta on Tuesday, October 6, 2026.
According to Airlangga, Indonesia has strong foundations to become a major base for data center development. In addition to Bintan, expansion is also being directed toward Bekasi and Karawang in West Java.
The two areas offer strategic advantages due to their proximity to the domestic market. Data center developments in these locations are targeted to reach around 600–700 megawatts, with the potential to add approximately 500 megawatts to Indonesia’s national capacity over the next two to three years.
However, the growth of AI requires more than computing capacity. Airlangga emphasized the importance of having access to high-quality and reliable data.
He explained that AI requires quality data to process information effectively. Indonesia therefore needs to strengthen its data infrastructure across sectors with significant potential for AI adoption.
Healthcare is considered one of the sectors with considerable potential. Indonesia is believed to have developed a relatively strong healthcare database through its experience in managing the COVID-19 pandemic.
This data could be leveraged to support machine learning applications and accelerate clinical trials in Indonesia.
“With a population of 280 million, we can provide data for machine learning and enable faster clinical trials, while also supporting the development of the pharmaceutical industry, where we are still lagging behind,” Airlangga said.
Beyond AI, the government is also encouraging the adoption of technologies such as machine learning, the Internet of Things (IoT), and automation across industrial sectors. These technologies are considered essential for improving efficiency, productivity, and the competitiveness of Indonesia’s industries.
Strengthening AI and Semiconductor Talent
AI development also requires a strong pool of skilled human resources. The government is therefore strengthening vocational programs and partnerships with businesses to prepare talent aligned with the needs of future industries.
The government aims to develop around 15,000 skilled workers over the next three years, including talent specializing in AI and semiconductors.
Indonesia’s digital economy is also expected to gain momentum through cooperation among ASEAN countries under the Digital Economic Framework Agreement (DEFA). The agreement is expected to help increase ASEAN’s digital economy from approximately US1trilliontoUS2 trillion.
With Indonesia accounting for around 40 percent of the ASEAN economy, the country has significant potential to become one of the key drivers of regional digital economic growth.
Airlangga said AI development forms part of a broader transformation of Indonesia’s economy. This transformation includes shifting from a resource-based economy toward higher-value industries, manufacturing, digitalization, and services.
Despite ongoing global uncertainty, Indonesia’s economy has continued to demonstrate resilience. During the first half of 2026, the national economy grew 5.45 percent year-on-year.
The manufacturing industry remained the largest contributor to national GDP, accounting for 18.50 percent. Meanwhile, non-oil and gas manufacturing grew 5.32 percent and contributed 16.83 percent to GDP.
Manufacturing activity also returned to expansion territory. Indonesia’s Manufacturing Purchasing Managers’ Index (PMI) reached 52.4 in September 2026, up from 49.8 in August.
Against this backdrop, the government is continuing to promote downstream processing as part of its strategy to increase economic value. The downstreaming agenda extends beyond minerals and coal to include agricultural, plantation, forestry, fisheries, and marine commodities.
Airlangga emphasized that downstream processing is part of a broader industrialization strategy, including the development of automotive, textile and textile products, fast-moving consumer goods (FMCG), and other strategic sectors.
Under its downstreaming roadmap covering 28 commodities, the government estimates potential investment of US618.1billion,exportsofUS857.6 billion, and additional value creation of US$235.9 billion.
According to Airlangga, these industrial developments must ultimately be integrated with digital transformation and the adoption of emerging technologies. The combination of downstream processing, industrialization, green energy, and digitalization is expected to improve Indonesia’s productivity and competitiveness while creating opportunities to pursue the country’s 8 percent economic growth target.
“These are the opportunities that the government continues to pursue. We are strengthening cross-sector coordination and inviting the business community to work together in developing these opportunities,” Airlangga concluded.
Conclusion
AI is becoming a key driver of Indonesia’s digital and industrial transformation, with data center capacity, quality data, skilled talent, and emerging technologies serving as critical foundations. By combining AI development with industrialization, downstream processing, and green energy, Indonesia aims to strengthen productivity and competitiveness while advancing its digital economy.
Read more: Airlangga Emphasizes the Urgent Need to Expand Data Center Infrastructure