Data Center Growth in Indonesia: Opportunities and Challenges

Southeast Asia, including Indonesia, is seeing significant growth in data center infrastructure. More than 4,600 MW of new data center capacity is planned across the region to support future AI demand.

Global Tech Giants Investment

Leading cloud providers like AWS, Google Cloud, and Microsoft Azure have launched or committed to Indonesian data centers, capitalizing on growing demand for secure and scalable cloud infrastructure.

Growth Drivers

• Data Localization Regulations: In-country data storage requirements
• Digital Economy Growth: Rapidly growing e-commerce and fintech
• AI Adoption: Computing needs for AI workloads
• Enterprise Modernization: Migration from on-premise to cloud

Infrastructure Challenges

Despite expanding capacity, challenges remain:

• Reliable power supply availability
• Evolving regulations
• Skills gap in data center management
• Sustainability and energy efficiency

World Bank Recommendations

The World Bank recommends Indonesia create a more conducive investment environment through coordinated incentives, streamlined regulations, and issuance of government regulations on personal data protection.