🧠 Food for thought

Implications, context, and why it matters.

Indonesia’s data center boom runs on AI and data sovereignty laws

• Indonesia’s data center market is expected to more than double from US$2.81 billion in 2025 to US$6.08 billion by 2031 1.
• Large cloud firms (hyperscalers that build and run huge data centers) such as Microsoft and Oracle are spending heavily in the country to meet AI demand. NeutraDC says AI makes up about 25% of global data center workloads 2.
• Rules that require onshore residency for personal data are pulling workloads from regional hubs such as Singapore into Jakarta, based on Mordor Intelligence’s analysis 3.
• New buildouts need deep funding, with construction costs at US$8-9 million per megawatt, according to a ResearchAndMarkets.com report cited by Yahoo Finance 1.

A possible NeutraDC stake sale tracks the regional buildout and its power limits

• Telkom Indonesia is considering selling a stake in its data center unit, NeutraDC, and has hired financial advisers for a possible majority sale, according to sources familiar with the matter. The same sources said it is aiming for a valuation of US$1 billion to US$1.5 billion, while a deal is not assured.
• NeutraDC links the plan to the wider regional digital economy, with Batam pitched as a data center hub due to its proximity to Singapore and its access to international subsea cable routes 2.
• A sale in the US$1 billion to US$1.5 billion range could set a new valuation reference for Southeast Asia’s digital infrastructure, which may speed up mergers and acquisitions (M&A) as rivals try to grow 3.
• Growth also strains power planning. Indonesia’s grid is 67% coal-based, which complicates the climate targets many hyperscalers set 3.