Jakarta, INTI - Indonesia is seen as having significant potential to attract investment in artificial intelligence (AI)-powered data centers as global demand for computing capacity continues to surge. The country’s abundant energy resources are emerging as a key competitive advantage and an important consideration for investors looking to develop AI infrastructure.
Indonesia Investment Authority (INA) Director of Investment Johan Batubara said global demand for AI computing is growing exponentially. This trend is encouraging data center operators to explore new locations beyond traditional hubs, where available capacity is becoming increasingly constrained.
“This is where Indonesia has a structural advantage as an energy-surplus country, precisely at a time when power availability has become a major constraint on global AI expansion,” Johan told Bisnis on Wednesday, September 9, 2026.
According to Johan, Indonesia’s advantage is further supported by its large digital user base, one of the biggest in Southeast Asia. The combination of energy availability and a substantial digital market is making Indonesia increasingly attractive to global investors.
Indonesia’s Energy Advantage Attracts AI Data Center Investment
Johan added that data centers are among the digital sectors prioritized for investment by INA. He described data centers as fundamental infrastructure for the digital economy, with a role increasingly comparable to highways and ports in supporting economic activity.
When selecting locations for data center development, investors consider electricity availability to be a primary factor. This has become particularly important as the global expansion of AI is increasingly constrained by the availability and reliability of power supplies.
Beyond electricity availability, investors also assess long-term total cost of ownership. One consideration is Indonesia’s development of renewable energy, in line with the net-zero commitments adopted by many global data center operators and hyperscalers.
Johan said other factors include relatively competitive land costs compared with Singapore, connectivity, the availability of digital talent, and regulatory stability.
“Power availability is therefore the primary consideration, while the direction of renewable energy development is becoming increasingly important,” he said.
Investment opportunities in the data center sector, however, extend beyond the development of core facilities. INA also sees potential across supporting sectors and the broader supply chain serving the data center industry.
Johan said INA has taken on a co-investor role through a platform established with DayOne. According to him, this involvement can provide additional confidence to international investors while helping bridge global investment requirements with Indonesia’s domestic ecosystem through coordination with various stakeholders.
Supporting Infrastructure Remains a Challenge
Despite the opportunities, investors still face several challenges in developing data center projects in Indonesia. One of the key issues is ensuring alignment between project development schedules and the availability of electricity, commonly referred to as “time-to-power.”
Investors are also assessing the readiness of supporting infrastructure in strategic locations outside traditional data center hubs. This includes fiber connectivity, water supplies for cooling systems, as well as the availability of contractors and skilled workers capable of supporting large-scale construction.
“One of the key considerations for investors is aligning project development schedules with power availability, or time-to-power, along with the availability of other supporting infrastructure in strategic locations outside traditional hubs, ranging from fiber connectivity and water supplies for cooling systems to contractors and skilled workers for large-scale construction,” Johan said.
Conclusion
Indonesia’s growing AI economy presents a significant opportunity to attract investment in large-scale data center infrastructure. With abundant energy resources, a large digital market, and improving connectivity, the country has several advantages that could make it an increasingly attractive destination for global data center operators and hyperscalers.
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