Jakarta. Indonesia is attracting billions of dollars in new investment for data centers as global technology firms race to expand artificial intelligence infrastructure, with projects in the pipeline expected to more than triple the country's existing capacity.

Chief Economic Affairs Minister Airlangga Hartarto said investors are planning data center projects with a combined capacity of about 1.3 gigawatts (GW), on top of the roughly 580 megawatts (MW) currently in operation.

The planned investments, including a major AI data center in Batam, are backed by Australia's Firmus Technologies and US chipmaker Nvidia.

"Indonesia currently has around 580 MW of operational data center capacity. The additional 1.3 GW that is in the pipeline, including the Batam project, represents investments of around $15 billion (Rp 271 trillion) to $20 billion," Airlangga said.

The Batam development marks Firmus Technologies' first data center investment in Indonesia. The Australian AI infrastructure company is partnering with Singapore-based data center operator DayOne to develop the Nvidia DSX AI Factory Campus, a 360-megawatt AI data center complex that is expected to become one of Southeast Asia's largest AI computing hubs.

According to The Straits Times, the project is projected to generate as much as $30 billion in off-take agreements during its first six years of operation. The Batam campus is also part of an eight-year strategic partnership between Firmus Technologies and Nvidia aimed at expanding AI infrastructure across the region.

Under the partnership, Firmus plans to deploy about 170,000 of Nvidia's latest-generation graphics processing units (GPUs) in phases from the first quarter of 2027 through early 2028, providing AI computing capacity for startups and fast-growing AI companies.

State-owned telecommunications company Telkom Indonesia will also invest in Indonesia's expanding data center industry.

"Almost all major technology companies are planning to expand their data centers in Karawang because data centers have become critical infrastructure for AI," he said.

The investment wave comes as Indonesia seeks to position itself as a regional AI hub by leveraging its large domestic market, abundant land and comparatively lower operating costs than regional competitors such as Singapore.

Airlangga said the government is simultaneously investing in human capital to support the rapidly growing digital industry.

Indonesia has partnered with British semiconductor designer Arm Ltd. to strengthen the upstream segment of its digital ecosystem, with the government aiming to integrate around 15,000 engineers into Arm's technology ecosystem.

"This industry requires an entirely new generation of talent," Airlangga said. "While our mineral policy focuses on downstreaming, in the digital sector, we are building capabilities upstream first before moving downstream. Human resources are the key."

Firmus Technologies Chief Executive Tim Rosenfield said the partnership with Nvidia is intended to expand access to AI infrastructure for companies that often struggle to secure financing or computing capacity. He said the initiative seeks to narrow the cost advantage enjoyed by large companies with strong credit ratings, creating a more level playing field for AI startups and emerging businesses.

According to property consultancy Cushman & Wakefield's APAC Data Centre H2 2025 report, Indonesia's data center market continues to expand rapidly. The number of data centers increased from 52 to 58 between 2024 and 2025, while the number of operators rose from 28 to 31.

Operational capacity grew from 278 MW to 321 MW during the period as new facilities came online. Another 186 MW is currently under construction, while 901 MW remains in the planning stage.

Separate figures compiled by Seasia Stats show Indonesia has 184 data centers, the highest number in Southeast Asia, ahead of Malaysia's 115 and Singapore's 83.