Jakarta, INTI - The development of artificial intelligence (AI) is increasing demand for data centers. Whenever people use a chatbot to summarize documents, generate images, or analyze data, the high-performance computers behind these services consume electricity to process information and keep servers running. Data centers therefore serve as essential infrastructure for AI development, cloud computing, and a wide range of digital services.
According to the International Energy Agency’s (IEA) Energy and AI report (2025), global data center electricity consumption is projected to increase from approximately 460 terawatt-hours (TWh) in 2024 to more than 1,000 TWh by 2030. The growing use of AI is a major factor driving this demand. As more services rely on AI, they require greater computing power. Consequently, data center development involves more than providing space for servers; it also requires a reliable electricity supply to keep these systems operating continuously.
The impact extends beyond electricity consumption. Data centers also require cooling systems to maintain servers at safe operating temperatures. At facilities that use water-based cooling, these requirements can place additional pressure on surrounding water resources. As data center capacity expands, operators must therefore carefully assess energy demand, water consumption, and local environmental conditions when planning new projects.
Energy demand is also an important consideration in Indonesia. According to the 2026 study Digital Carbon Footprint Assessment of Universitas Indonesia Data Center Based on the GHG Protocol, carbon emissions from the operation of Universitas Indonesia’s data center are estimated at 404.7 tonnes of carbon dioxide equivalent (CO₂e) annually. Electricity consumption accounts for the largest share of the calculated emissions. Although the findings relate to a single facility and cannot be directly generalized to all data centers in Indonesia, they demonstrate how computing requirements affect energy consumption and why these impacts should be considered from the earliest stages of development.
For this reason, AI data center development must account for more than technological capabilities and server capacity. Electricity sources, energy efficiency, cooling systems, water requirements, and land use should also be incorporated into project planning. For Indonesia, these considerations are essential to ensuring that digital infrastructure development progresses alongside efforts to reduce environmental impacts.
With proper planning, data centers can support AI development and the digital economy without overlooking resource constraints. The challenge is not to halt digital infrastructure development, but to ensure that its growth is supported by greater energy efficiency and responsible resource management.
AI Growth Creates Data Center Investment Opportunities in Indonesia
Demand for data centers continues to grow alongside the expanding use of artificial intelligence. Generative AI services, cloud computing, and digital applications require substantial computing capacity to process data quickly. This creates opportunities for Indonesia to attract investment in digital infrastructure, particularly if the country can provide reliable connectivity, dependable electricity supplies, and a predictable business environment.
Batam is one of the locations attracting investor interest to meet this demand. According to a report by Antara dated June 29, 2026, Australia-based Firmus Technologies planned to develop a 360-megawatt AI data center campus through a partnership involving Nvidia and DayOne. The facility is intended to support AI computing requirements across the Asia-Pacific region.
Batam’s proximity to Singapore is another advantage, connecting the island to the region’s broader business and digital technology ecosystem. However, investment potential depends on more than location alone. Electricity availability, water resources, and supporting infrastructure must also keep pace with expanding data center capacity.
The importance of such planning is consistent with findings from research on environmentally sustainable data center development. The 2026 study Toward a Sustainable Energy Future: Can Green Data Center Construction Promote Energy Efficiency? examines how green data center construction can potentially improve energy efficiency in urban areas, while also exploring differences in its effects across cities. These findings suggest that the benefits of digital investment should be assessed not only by the capacity provided, but also by how facilities are constructed and operated.
Nevertheless, alternative energy sources represent one approach to reducing environmental impacts. Data centers must also manage the electricity required to operate servers and cooling systems that keep equipment functioning properly. As computing capacity expands to meet AI demand, companies need to ensure that growth does not lead to unnecessary energy waste or excessive water consumption. Operational efficiency is therefore a key factor in determining whether data center development can support sustainable digital growth.
These challenges cannot be addressed by data center operators alone. Electricity grid readiness, water availability, and industrial zone planning also influence the long-term impact of new facilities. Investment decisions should therefore account for local infrastructure and environmental conditions from the planning stage.
With this approach, Indonesia can attract data center investment while reducing the risk of placing excessive pressure on the resources of the regions where these facilities are built.
Conclusion
Indonesia has significant opportunities to attract data center investment as AI adoption accelerates. However, sustainable growth will depend on reliable energy supplies, efficient cooling systems, responsible water management, and environmentally conscious infrastructure planning. Balancing digital expansion with resource efficiency will be essential to building a competitive and sustainable digital economy.
Read more: Deputy Coordinating Minister Dradjad Tasked with Addressing AI Data Centers’ Water Demands