Indonesia Data Center Market: Emerging Trends, Growth Opportunities by 2034

Indonesia's data center industry is experiencing unprecedented growth, driven by surging demand for cloud services, digital transformation initiatives, and robust government support. The market, valued at USD 3.1 Billion in 2025, is projected to reach USD 8.4 Billion by 2034. This remarkable expansion reflects Indonesia's strategic importance as Southeast Asia's largest digital economy and its commitment to building world-class digital infrastructure.

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Market Overview and Key Drivers

The Indonesian data center landscape is being reshaped by multiple converging forces. With over 221 million internet users and internet penetration reaching 79.5% in early 2024, the country has become a digital powerhouse in the region. The digital economy alone is expected to exceed USD 130 billion by 2025, fueled primarily by e-commerce and fintech sectors that require secure, scalable, and high-performance data infrastructure.

Remote work culture has accelerated the need for reliable connectivity and data access, while enterprises increasingly adopt cloud computing services to support their operations. Concerns about data security and privacy have further intensified demand for advanced data center solutions that offer robust protection and compliance with regulatory requirements.

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Government Initiatives Driving Market Growth

The Indonesian government has positioned digital transformation as a national priority through several strategic initiatives:

Making Indonesia 4.0: This flagship roadmap aims to establish Indonesia among the world's top ten economies by 2030 through comprehensive digital transformation. The initiative is driving significant investments in data center infrastructure to support industrial digitalization across sectors.
100 Smart Cities Initiative: This program underscores the government's focus on enabling technologies and digital infrastructure across urban centers, creating substantial demand for localized data center services and edge computing capabilities.

National Data Center (PDN) Development: Indonesia is building its first National Data Center in Cikarang, West Java, scheduled for full operation in 2025. This facility represents a shift from decentralized systems-where over 2,700 data centers were managed by 629 government agencies-to a more integrated and efficient collaborative model. The government plans to save over IDR 20 trillion (approximately USD 1.3 billion) annually through consolidation while improving service delivery and data security.

Electronic-Based Government System (SPBE): The government's commitment to digitalizing public services by 2025 through SPBE is expected to further drive demand for secure, accessible, and integrated data infrastructure.
The Ministry of Communication and Digital Affairs (Komdigi) is leading this transformation by supporting 5G development, AI policy, data center construction, and expansion of digital public services. Additionally, the government is developing Batam as a strategic national data center hub to promote balanced investment distribution beyond Java, capitalizing on its strategic geographic location and connectivity advantages.

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Major Investments and Market Developments

The Indonesian data center market is attracting substantial capital from both global hyperscalers and regional operators, with total upcoming investments poised to exceed USD 10 billion at full build-out. Around 563 MW of additional power capacity is expected to be added during 2025-2030, reflecting robust infrastructure expansion.

Recent landmark investments include:

EDGNEX Data Centers by DAMAC announced a USD 2.3 billion investment in June 2025 for a next-generation AI-powered data center in Jakarta, with a projected capacity of 144 MW. The facility will deploy high-density AI racks and target a Power Usage Effectiveness (PUE) of 1.32, setting new sustainability benchmarks for the region. Phase one is expected to be operational by December 2026.
DCI Indonesia inaugurated JK6, its eighth data center at the H1 Campus in Cibitung in June 2025. This 36 MW facility is the largest single data center ever built in Indonesia and features AI-ready infrastructure with liquid cooling capabilities to support high-density workloads. DCI's total installed capacity now reaches 119 MW, cementing its position as the country's largest operator.
BDx Indonesia completed Phase One of its CGK4 AI campus in Jatiluhur in July 2024, marking Indonesia's first AI-ready data center park powered by renewable energy. The initial phase provides approximately 70 MW of white space with power density capabilities up to 120 kW per rack and features advanced liquid-cooling systems and Nvidia DGX-Ready certification.

Microsoft announced a USD 1.7 billion investment in April 2024-the largest in the company's 29-year history in Indonesia-to establish the Indonesia Central cloud region. This facility will provide high-bandwidth, low-latency connectivity to Microsoft's global network while supporting local data residency requirements.

Other major players including Amazon Web Services, Google Cloud, Alibaba Cloud, Equinix, NTT DATA, Telkom Indonesia, ST Telemedia Global Data Centres, and Princeton Digital Group have all announced significant expansion plans across Jakarta and emerging hubs like Batam.

Market Segmentation

By Data Center Size: The market comprises large, massive, medium, mega, and small data centers, with hyperscale and large facilities experiencing the strongest growth due to cloud service provider expansion.

By Tier Type: Demand for Tier III and Tier IV data centers is surging, currently accounting for more than half of all data center construction activity as of 2025. These higher-tier facilities offer greater redundancy, reliability, and uptime guarantees essential for mission-critical applications.

By Absorption: The market is divided into utilized and non-utilized capacity, with wholesale colocation continuing to dominate due to higher capacity requirements from cloud providers and hyperscalers.

By Region: Greater Jakarta remains the dominant hub, but strategic expansion is occurring in Java, Sumatra, Kalimantan, Sulawesi, and other regions, particularly in Batam which is contributing close to 10% of planned IT power capacity.

Emerging Technology Trends

Hyperscale Infrastructure: The market is witnessing a significant shift toward hyperscale infrastructure, with facilities offering 10 MW+ IT load capacities. These next-generation data centers feature modular designs, AI-enabled power and cooling optimization, and direct connectivity to international subsea cables.
Advanced Cooling Technologies: Liquid cooling is emerging as a transformative solution, particularly for AI and high-performance computing workloads. ST Telemedia Global Data Centres announced expansions in June 2024 featuring liquid immersion cooling and direct-to-chip cooling techniques to support increasing power densities and heat loads.

Edge Computing: As demand for faster, lower-latency services grows, edge data center infrastructure is expanding to bridge connectivity gaps, support IoT deployments, and enable smart city applications across Indonesia's archipelago.

AI and Generative AI Adoption: A Microsoft report projects that generative AI adoption in Indonesia could unlock USD 243.5 billion in economic production capacity, equivalent to approximately 18% of the country's 2022 GDP. This AI-driven transformation is necessitating custom-built hyperscale campuses with greater power redundancy and specialized infrastructure.

Sustainability and Green Infrastructure

Sustainability has emerged as a defining trend, driven by environmental responsibility and economic efficiency. Under PLN's electricity supply business plan for 2025-2034 (RUPTL), the state utility aims to add 39.5 GW of power capacity over the next decade, with 76% coming from renewable sources. PLN's Green as a Service (GEAS) Renewable Energy Certificate program saw sales grow to 10.99 TWh in 2024, an increase of 117% from 2023.

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This release was published on openPR.