Jakarta, INTI - Artificial intelligence (AI) is emerging as the primary driver of Indonesia's rapidly expanding data center industry, fueling unprecedented demand for computing capacity and reshaping infrastructure requirements across the sector.
According to Erick Hadi, Head of Talent Development & Industry Certification at the Indonesian Data Center Providers Association (IDPRO), Indonesia's data center market is growing faster than the global average, which typically ranges between 20% and 25% annually.
The surge is being driven not only by accelerating AI adoption but also by increasing foreign investment, as regional data center projects shift from neighboring markets following Singapore's moratorium on new data center developments in 2019.
"Globally, the data center industry grows by around 20% to 25% each year. Indonesia, however, is expanding at an even faster pace," Erick said during an event in Jakarta.
He explained that hyperscale operators and global cloud providers are rapidly expanding their infrastructure to serve hundreds of millions of digital users across Southeast Asia.
Unlike previous growth cycles that were largely fueled by rising internet traffic, today's expansion is increasingly powered by AI workloads. Modern digital platforms rely on AI to process vast amounts of data and deliver personalized services, significantly increasing demand for high-performance computing infrastructure.
Erick added that Indonesia has become an increasingly attractive destination for investment as companies seek alternative locations to support the region's growing digital economy. While many projects initially shifted to Malaysia after Singapore suspended new developments, Indonesia is now attracting a growing share of new investments thanks to its expanding market and digital infrastructure potential.
AI Is Redefining Data Center Infrastructure
The rise of AI is also transforming the technical standards required for modern data centers.
Ajay Bhargava, Executive Vice President for the ASEAN Region at Rittal International, explained that conventional data centers typically require cooling capacities of around 10 kilowatts (kW) per rack, with high-density systems reaching 20–35 kW.
AI infrastructure, however, requires a dramatic increase in cooling performance.
"Traditional data centers are designed for low-density computing, requiring around 10 kW, or up to 35 kW, of cooling per rack. AI data centers, by comparison, can demand between 100 and 200 kW per rack," Ajay said.
The significant increase is largely due to the use of Graphics Processing Units (GPUs), which generate substantially more heat than conventional Central Processing Unit (CPU)-based servers.
Despite these higher technical requirements, Ajay believes Indonesia is well positioned to capitalize on the AI data center boom. He noted that future growth will depend on supportive regulations, continued investment, government policies on data sovereignty, and the expansion of digital infrastructure.
With its large domestic market and abundant access to essential resources such as electricity and water, Indonesia offers strong long-term potential for AI-driven data center investments.
"This represents a multi-million-dollar opportunity, not only for our company, but for the entire industry," Ajay concluded.
Conclusion
Indonesia's data center industry is experiencing rapid growth, driven by rising AI adoption and increasing demand for high-performance computing infrastructure. With strong investment potential, abundant resources, and a growing digital economy, Indonesia is positioning itself as a key data center hub in Southeast Asia.
Read more: Indonesia's Data Center Industry Surges as AI Fuels Investment Growth