Indonesia Aims to Become a Major Data Center Hub

Indonesia is rapidly evolving into a critical hub for data center infrastructure, a shift driven by three structural advantages: abundant renewable energy, extensive land and water resources, and a population of over 280 million who are highly connected to the internet. Maybank Investment Bank notes that this potential is underpinned by a surge in capacity, which is expected to grow from 637 megawatts in May 2026 to 2.7 gigawatts by 2030. This expansion is not merely a local development but a strategic move to position the country as a key player in the global digital economy.

The driving force behind this growth is the increasing demand for data processing, particularly for artificial intelligence. Maybank estimates that one megawatt of IT load can support approximately six AI server racks or 60 to 80 conventional servers. As of mid-2026, the state utility PLN reports 1.9 gigawatts of installed capacity across 159 customers, with the majority concentrated in West Java. The utility projects total capacity to reach 25 gigawatts by 2034, supported by programs that allow investors to build their own infrastructure to speed up network expansion.

Regional connectivity drives new routes

While Singapore currently dominates Southeast Asian data centers as the primary interconnection hub, Indonesia is looking to change this dynamic. Maybank identifies an opportunity for Indonesia to develop its eastern region for hyperscale data centers. Specifically, the city of Manado could serve as a landing point for an alternative data route to the United States, bypassing the traditional paths through Hong Kong and Japan. This would allow Indonesia to extend connectivity to the Philippines, Taiwan, and Japan from North Sulawesi, creating a more direct and efficient network for international data traffic.

Jakarta remains the backbone of the country's internet ecosystem due to historical factors in its information and communication technology development. However, the center of gravity for new data centers is shifting. Expansion in Greater Jakarta is moving away from the city center, particularly the Kuningan area, towards Bekasi and Cikarang. These locations are preferred because they offer proximity to subsea-cable landing points, direct access to an industrial-grade electrical grid, and closeness to water reservoirs, which are essential for cooling systems.

Batam faces water and power challenges

Batam, located just 15 kilometers by sea from Singapore, offers the advantage of low latency, estimated at around two milliseconds. The island has domestic power-generation capacity, with an installed capacity of about 0.9 gigawatts, and plans to add another 860 megawatts by 2032. However, the primary challenge for Batam is water availability. With rainfall conditions similar to those in Johor and Singapore, the region may need to invest in water desalination to support the cooling requirements of large-scale data centers.

Despite these challenges, major operators are moving forward with ambitious plans. DCI Indonesia, for instance, plans to build a data center exceeding 1,000 megawatts in Bintan on 700 hectares of land. Maybank views this expansion as a gradual process, noting that construction will take time and will be adjusted to actual demand. The adoption of AI in Indonesia is still in a nascent stage, but the infrastructure is being laid to support a future where computing power is a key driver of economic growth.

Infrastructure growth must match demand

The success of Indonesia's data center expansion depends on aligning infrastructure growth with actual workload demand. Maybank emphasizes that the number of people served per server will depend on the mix of computing power deployed. As the country moves forward, it must balance the aggressive targets for capacity growth with the realities of construction timelines and market demand. The goal is to create a sustainable digital ecosystem that supports both local and international data traffic, leveraging the country's natural resources and strategic location.