Indonesia on its way to becoming the AI champion in Southeast Asia

With ambitious investments and strategic initiatives, Indonesia is aiming to take the lead in Artificial Intelligence (AI) within the ASEAN countries.

Indonesia's Rise in the AI Landscape

In recent years, Indonesia has made significant strides in the tech sector. Particularly in e-commerce, the country reached a remarkable $77 billion in revenue in 2023, securing the top position in Southeast Asia. This development forms the foundation for Indonesia's ambitious plans to establish itself as a leader in Artificial Intelligence (AI) within the ASEAN region.

Investments in AI Infrastructure

In 2024, investments in AI in Indonesia surpassed the $90 billion mark, making the country the second-largest recipient of AI investments among ASEAN nations. A significant portion of these investments is directed towards expanding data center capacities, which are set to increase from 202 MW to 743 MW, supporting AI-powered applications in various sectors such as education, marketing, and logistics.

Global Tech Giants Bet on Indonesia

International tech giants recognize Indonesia's potential and are investing in local AI development. Microsoft plans to invest $1.7 billion in cloud and AI infrastructure in Indonesia. This investment includes building new digital infrastructures, providing AI training for 840,000 people, and supporting the growing developer community in the country.

Protecting the Domestic Tech Industry

To protect its local tech industry, Indonesia recently banned the sale of Apple's iPhone 16, citing non-compliance with local regulations requiring 40% of smartphones sold in Indonesia to be locally produced or developed. This measure aims to safeguard local manufacturers and attract foreign investments.

Challenges on the Path to AI Leadership

Despite impressive progress, Indonesia faces several challenges. The development of AI requires significant investments in research and development, as well as training a skilled workforce. Additionally, the country needs to ensure that digital infrastructure keeps pace with rapid growth and that regulatory frameworks are created to foster innovation while ensuring ethical standards.

Advantages and Opportunities of Investing in BRICS+ Countries

The BRICS+ countries (Brazil, Russia, India, China, South Africa, and other emerging economies) offer investors attractive opportunities. These nations are characterized by dynamic economic growth, expanding middle classes, and increasing urbanization. Investments in these markets provide access to new consumer groups and benefit from state initiatives to promote technology and innovation. Additionally, investors can diversify their portfolios and capitalize on higher returns associated with rapidly growing economies.

Indonesia's ambition to position itself as a leader in AI in Southeast Asia highlights the country's potential and determination to drive technological progress. For investors, Indonesia and the BRICS+ nations present diverse opportunities to benefit from the dynamic developments in these emerging markets.