Indonesia’s data center industry is moving into a new scale, and artificial intelligence is helping push that demand even faster. National operational capacity has reached 637 megawatts and is targeted to climb to 1.6 gigawatts by the end of the year.
That growth is drawing attention well beyond the domestic market. Global investors are watching Indonesia more closely because of its large internet base, rising digital consumption, and the increasing need for storage and computing power.
A market that has outgrown its early stage
The shift is striking when viewed against the industry’s starting point. IDPRO Chairman Hendra Suryakusuma said that when the association was founded in 2016, managed capacity was only around 32 MW and the organization had just five members.
Today, IDPRO has 21 active data center providers serving needs that range from smaller operations to large enterprises. Their customer base includes hyperscalers such as Google, Amazon, Alibaba, and Tencent.
That expansion also reflects a broader change in Indonesia’s position in the regional data center map. Demand is no longer driven only by general digital services, but increasingly by AI workloads that require far more computing resources.
Why investors are paying attention
Indonesia offers a large domestic market that is hard to ignore. The country has a population of 286 million, and more than 80 percent, or around 230 million people, are active internet users.
Its digital economy is also expanding quickly. Gross Merchandise Value from Indonesia’s internet economy reached $135 billion last year and is projected to rise to $350 billion by 2030.
Those numbers help explain why the country is being viewed as a long-term opportunity in Southeast Asia. Relative geopolitical stability in the region has also strengthened investor interest in digital infrastructure projects.
One strong signal came from DAMAC Digital of Dubai, which is set to become a member of IDPRO. The company reportedly raised its investment commitment from 100 MW to 1 GW.
AI is changing the technical demands
The rise of AI is reshaping what data centers must be able to handle. Between 2012 and 2017, a single server rack typically required about 3 kW of power, but modern AI servers with dense GPUs such as NVIDIA GB200 can need as much as 120 kW per rack.
The next generation of servers expected to arrive in the third quarter of this year is projected to demand up to 600 kW per rack. That jump creates intense heat and makes conventional air cooling less effective.
As a result, the industry is shifting toward liquid cooling. Ariffa Hasanah, System and Solution Architect Engineer at Schneider Electric Indonesia, said the company is working with NVIDIA to design modern physical data center architecture.
Ellya Cen, Business VP Data Center at Schneider Electric Indonesia, added that the company’s latest product can deliver cooling liquid directly to the chipset, with a single-unit cooling capacity of 2.3 megawatts. That capability is becoming increasingly important as AI servers grow denser and more power-hungry.
The bottlenecks that still slow the pace
Despite the strong outlook, the industry still faces structural obstacles. IDPRO has pointed out that business processes in Indonesia are slower than in neighboring countries such as Malaysia and Thailand.
Companies in Indonesia must pass through a bureaucratic chain involving at least nine different institutions. In Jakarta, obtaining a Building Approval or PBG can take as long as 7 to 9 months because of the complexity of technical design details.
Fiscal policy is another issue. There are still no incentives for bringing in AI servers, and the combined tax and import duty burden can reach 23 percent.
That puts Indonesia at a disadvantage compared with Malaysia, which has a one-stop body such as MDEC, or Thailand through OSOS, which offers tax exemptions and easier investment procedures.
Talent, water, and energy are now part of the equation
Rapid growth has also intensified competition for skilled workers. IDPRO says the market is in a talent war, with certified workers being poached from one company to another.
To reduce dependence on foreign experts, several local companies have begun working with universities such as UI and ITB. The collaboration is aimed at building a dedicated data center curriculum within Electrical Engineering and Mechanical Engineering programs.
Energy and water management are also becoming central concerns. Liquid cooling requires significant use of clean water, so operators must manage it carefully to avoid putting excessive pressure on the surrounding environment.
IDPRO is urging PLN to accelerate the use of renewable energy in support of more sustainable operations. PLN has said that 76 percent of new energy supply over the next five years will come from green supply.
Source: www.medcom.id
