Jakarta, INTI - Indonesia's data center industry is expanding at a pace that outperforms the global average, driven largely by the rapid adoption of artificial intelligence (AI). The growing demand for AI computing power is accelerating investment in data center infrastructure and positioning Indonesia as one of Southeast Asia's fastest-growing digital infrastructure markets.
According to Erick Hadi, Head of Talent Development & Industry Certification at the Indonesian Data Center Providers Association, the global data center industry typically grows by around 20–25% annually. Indonesia, however, is experiencing even stronger growth, fueled by increasing AI workloads and rising investment across Southeast Asia.
"Globally, the data center industry is expanding at an average rate of 20 to 25 percent per year. Indonesia, however, is growing even faster," Erick said in Jakarta on Monday.
AI Drives the Next Wave of Data Center Expansion
Erick explained that hyperscale cloud providers and global cloud service companies now require significantly larger data center capacity to serve hundreds of millions of digital users across Southeast Asia.
While previous waves of data center development were primarily driven by rising data consumption, AI has become the dominant force reshaping infrastructure requirements. Advanced AI applications, including machine learning, large-scale data processing, and personalized digital services, demand substantially greater computing resources than conventional workloads.
Regional Investment Shifts Benefit Indonesia
Indonesia is also benefiting from changing investment patterns within Southeast Asia.
Following Singapore's suspension of new data center developments in 2019 due to land and energy constraints, many projects initially shifted to Malaysia. More recently, Indonesia has emerged as one of the region's preferred destinations for new data center investments, supported by its large domestic market and rapidly expanding digital economy.
According to Erick, these factors have made Indonesia increasingly attractive to global investors seeking long-term digital infrastructure opportunities.
AI Raises Cooling Requirements to New Levels
The expansion of AI is transforming not only computing capacity but also the technical standards for data center construction.
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 computing reaching approximately 20–35 kW per rack.
AI-focused data centers, however, can require cooling capacities ranging from 100 to 200 kW per rack because AI servers rely heavily on Graphics Processing Units (GPUs), which generate substantially more heat than traditional CPU-based systems.
Infrastructure and Policy Will Determine Future Growth
Despite the enormous potential of AI-driven data centers, Ajay emphasized that future growth will depend on several critical factors, including regulatory certainty, investment-friendly policies, data sovereignty frameworks, and the readiness of Indonesia's digital infrastructure.
Reliable electricity supply and sustainable water resources will also be essential to support the operation of hyperscale data centers.
"If you ask how large this opportunity could become, I believe it represents a multi-million-dollar opportunity, not only for us, but for the entire industry," Ajay said.
As AI adoption accelerates across industries, Indonesia is expected to become one of Southeast Asia's fastest-growing data center markets. Realizing this potential, however, will require consistent government policies, stronger energy infrastructure, and continued investment in digital talent capable of supporting the industry's evolving demands.
Conclusion
Indonesia's rapidly expanding data center industry is being fueled by the growing adoption of artificial intelligence, creating new opportunities for investment and digital infrastructure development. With supportive regulations, reliable energy infrastructure, and a skilled digital workforce, the country is well positioned to become a leading AI-powered data center hub in Southeast Asia.
Read more: Indonesia's Data Center Industry Growth Needs to Be Balanced with the Development of Digital Talent