Jakarta, INTI - PT Indosat Tbk (ISAT) could benefit from the strong growth outlook of Indonesia’s data center industry. BRI Danareksa Sekuritas has set a target price of Rp3,430 per share for ISAT, accompanied by a buy recommendation.
Indonesia’s Data Center Demand Continues to Rise
In its research, BRI Danareksa noted that demand for data centers in Indonesia continues to rise. Jones Lang LaSalle (JLL) estimates that data center demand could reach 2 gigawatts (GW), significantly exceeding the approximately 400 megawatts (MW) of operational data center capacity in Greater Jakarta in 2025.
The research firm said the gap indicates substantial room for further expansion in Indonesia’s data center market. Opportunities could also increase if data center development in neighboring countries such as Malaysia and Thailand faces additional restrictions.
Despite strong demand, data center expansion continues to face challenges related to electricity infrastructure. JLL noted that the main issue is not power generation capacity, but the connection and distribution of electricity to data center locations.
To address this challenge, state-owned electricity provider PT PLN (Persero) plans to build new substations in Karawang, Purwakarta, and Subang with a combined capacity of around 2 GW. The infrastructure is targeted for completion between 2028 and 2029.
AI Drives Higher Power and Water Demand
BRI Danareksa also expects advances in Artificial Intelligence (AI) to further drive data center demand. AI workloads rely heavily on graphics processing units (GPUs), which require significantly more electricity than conventional data center systems.
Traditional server racks typically consume around 5–10 kilowatts (kW) of power. In comparison, GPU-powered AI racks can require 30–40 kW, while AI systems using liquid cooling can reach 60–100 kW per rack.
Water availability is another important consideration in data center development. A single AI-focused data center facility can require approximately 6,000–15,000 cubic meters of water per day. As a result, industrial areas with their own water treatment infrastructure are increasingly considered suitable locations for large-scale data center projects.
BRI Danareksa maintains that despite these challenges, Indonesia’s data center sector continues to have positive growth prospects, supported by rising demand. However, rapid advances in GPU technology and potential regulatory changes remain key risks for the industry.
Conclusion
Indonesia’s data center market continues to show strong growth potential as demand rises and AI adoption accelerates. While power infrastructure, water availability, rapid GPU advancements, and regulatory changes remain key considerations, continued investment in digital infrastructure could support the sector’s expansion and create further opportunities for industry players such as Indosat.
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