Key facts
- Indonesia is promoting equitable distribution of data centers to avoid concentration in developed areas.
- The government aims to direct data center development away from Java and Batam, including for AI support.
- Data center players are resisting a government plan to confine new facilities to industrial estates.
- Concerns exist over the vast electricity and water needed for data centers amid an AI-driven investment boom.
Indonesia's Ministry of Communication and Digital Affairs is promoting the equitable distribution of data centers across the archipelago, aiming to prevent a concentration of digital infrastructure in developed regions like Java and Batam. This initiative comes as the nation experiences a surge in data center investments driven by the global AI boom, raising concerns about the significant electricity and water resources required to operate these facilities. Data center players are pushing back against a government proposal to confine new facilities to industrial estates, fearing it could increase costs and limit site options. They argue that data centers vary in scale and function, and some may need to be located closer to end users. The Indonesia Data Center Ecosystem Council (IDCEC) has called for greater clarity on utility tariffs, infrastructure, and permit procedures, warning that forced development in industrial estates could lead to significant investment costs and operational disruptions.