Jakarta. Sovereign wealth fund Danantara and the French defense giant Thales have sealed a memorandum of understanding (MoU) that could unlock investments in artificial intelligence (AI) and military equipment.

The MoU covers AI, defense systems, digital technologies, and cybersecurity, according to Danantara. Both sides have agreed to discuss possible investments in Indonesian defense technology manufacturing, airport security, AI use cases, cybersecurity operations centers, and post-quantum technologies. 

However, Danantara said on Thursday that the signed document was only an “initial framework”. In other words, actual investments will be subject to “further evaluations, applicable governance, and definitive agreements”.

Danantara managing director Ricardo Irwan Rei said that investments in such sectors could speed up “technology transfer, create high-skilled employment, [and] strengthen local industrial capability”.

Guy Bonassi, the senior vice-president for Asia of Thales Group, said the company was “honored” to work with the fund on “ambitious projects that would foster economic growth”.

Danantara signaled that Thales could team up with the state-owned enterprises (SOEs) under its wings, while avoiding naming specific companies.

Amid the scant details, the fund is now responsible for all Indonesian SOEs, some of which are no stranger to Thales. 

The telecommunications giant Telkom had even clinched a Thales digital security and smart city deal in 2025. Jakarta has procured Thales' long-range air surveillance radars in partnership with the electronics firm Len Industri. Indonesia has received the first two GM403 radars earlier this year amid a huge appetite for military upgrades.

Thales has operated in Indonesia for decades, and is even behind the launch of the Satria-1 satellite that has helped connect the country’s remote areas to the internet.

Government data showed French direct investment inflows into Indonesia neared $300 million in the first half of 2026. This only put France fifth in Indonesia’s top foreign investor rankings that period.

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