News - Indonesia Has Great Potential for AI Investment in 2025

Indonesia Has Great Potential for AI Investment in 2025

Mar, 14 2025

KABARBUSA.COM - Amid the rapid development of artificial intelligence (AI), Indonesia has the potential to become an attractive market for AI investment in the next few years. Economist from the Institute for Development of Economics and Finance (Indef) Nailul Huda, sees this trend as a great opportunity for investment, especially in the domestic technology sector such as data centers.

"The impact is that the need for data centers is getting higher," said Huda via written message to Kabarbursa.com in Jakarta, Friday, January 3, 2025.

Although Indonesia faces challenges in developing domestic technology, Huda assessed that the need for larger data centers will be increasingly urgent along with the rapid development of AI.

"I see that the future trend of AI can still develop and more and more companies will adopt it," he said.

Huda said that the government's policy requiring data servers to only be used domestically is a challenge in itself. However, this can be an opportunity for the local data center industry. Because, this policy actually supports the development of domestic technology, including the provision of stronger data center services.

However, behind the potential, Huda emphasized that Indonesia still faces major challenges in terms of domestic technology development.

"Unfortunately, [Indonesia's] domestic technology is still far behind. Starting from innovation, human resources (HR), to (the capacity of) Indonesian hardware factories, it is still behind compared to other countries," he explained.

In other words, Indonesia has great potential to quickly adopt technology due to its large population. However, there is still a significant gap between needs and capabilities in meeting them. This means that Indonesia needs to focus on developing domestic technology and strengthening human resource capacity.

Investment Increases Sixfold

Meanwhile, investment in generative artificial intelligence (generative AI) technology in Indonesia has shown a very rapid increase in the last three years. Minister of Communication and Digital Meutya Hafid, revealed that this sector has increased more than sixfold, marking the acceleration of technology adoption and development in the country.

In 2021, investment in generative AI only reached USD4 billion or around IDR63.7 trillion with an exchange rate of IDR15,947 per US dollar. However, in 2023, this figure will jump to USD25 billion or around IDR398 trillion.

Generative AI, which is able to create new content such as text, images, and audio, is one of the main drivers of innovation in various sectors. This significant increase reflects the seriousness of business actors in the private sector to adopt advanced technology to increase their competitiveness in the digital era.

"In Indonesia, the development of AI has experienced extraordinary significance. Investment in generative AI technology has increased more than sixfold," said Meutya at the AI for Indonesia event held in Jakarta on December 4, 2024.

However, the acceleration of AI technology has also had a diverse impact on the job market. In developed countries or the global north with high incomes, around 60 percent of jobs have been affected by the presence of AI.

Meanwhile, in developing countries or the global south, the impact of AI varies, with 40 percent and 26 percent of jobs in middle- and low-income countries respectively affected by this technology. Meutya highlighted that developed countries such as the United States, Spain, Sweden, Belgium, the Netherlands, and France currently dominate the demand for AI job markets at the global level.

To accelerate equitable digital transformation, the Indonesian government is actively collaborating with various global technology companies. One of the main goals is to build digital infrastructure and develop local digital talent, especially those related to AI technology.

"We are working with several global tech companies to realize digital talents, especially in the field of AI," explained Meutya.

In addition to supporting the private sector, generative AI also has great potential to improve public services. This technology can be used to analyze and process big data efficiently and effectively. As a concrete step, the government plans to build a number of national data centers that aim to integrate various data services. One of these national data centers will be built in Cikarang, West Java.

The existence of this national data center is expected to support the One Data Indonesia program, which aims to unite all government data into one valid and sustainable base. The integrated data will be an important foundation in implementing AI technology for various public services, both in policy planning and providing services to the community.

"This data center has a vital role to ensure that AI technology can be utilized optimally, based on data validity and continuity," added Meutya.

With increasing investment, active international cooperation, and a comprehensive digital infrastructure development plan, Indonesia is in a strategic position to become one of the leaders in generative AI technology in the Asian region. This digital transformation is not only a driver of economic growth, but also an important milestone in Indonesia's journey towards digital sovereignty and global competitiveness in the era of advanced technology. (*)

(SOURCE)

Quarter 1 2024 West Java Investment Reaches IDR 64.65 Trillion, These are the Five Regions with the Highest Investment

TRIBUNJABAR.ID, BANDUNG - Realisasi investasi pada Triwulan I tahun 2024 atau periode Januari-Maret 2024 di Jawa Barat masih menunjukkan peningkatan. Berdasarkan Laporan Kegiatan Penanaman Modal (LKPM), investasi yang direalisasikan oleh para investor di 27 kabupaten/kota di Jabar berjumlah Rp 64,65 triliun pada periode ini. Kepala Dinas Penanaman Modal dan Pelayanan Terpadu Satu Pintu (DPMPTSP) Jabar Nining Yulistiani mengatakan total realisasi investasi PMA dan PMDN ke Jawa Barat terbilang masih moncer di tengah berbagai dinamika ekonomi global. "Realisasi ini dengan jumlah penyerapan tenaga kerja sebanyak 86.280 orang, serta jumlah proyek sebanyak 31.649 proyek LKPM," katanya di Bandung, Jumat (3/5/2024). Nining mencatat realisasi investasi PMA (Penanam Modal Asing) dan PMDN (Penanam Modal Dalam Negeri) pada Triwulan I tahun 2024 sebesar Rp 64, 65 triliun, meningkat Rp 14,64 triliun dibanding periode yang sama tahun lalu. "Angkanya meningkat 29,29 persen dari tahun 2023 periode yang sama, yang sebesar Rp. 50,00 triliun dan telah mencapai 29,25?ri target yang ditetapkan pemerintah pusat/BKPM RI sebesar Rp 221,06 triliun," paparnya Sementara peringkat lima besar daerah yang paling diminati oleh para investor antara lain Kabupaten Bekasi dengan realisasi mencapai Rp 19,1 triliun, Karawang Rp16,3 triliun, Kabupaten Bogor Rp 5,5 triliun, Kota Bekasi Rp 4,7 triliun, dan Kota Bandung Rp 3,05 triliun. Nining menambahkan sebagai destinasi utama investasi di Indonesia, peluang investasi di Jabar terus bertumbuh didukung oleh berbagai keunggulan yang ditawarkan melalui iklim investasi yang kondusif, konektivitas infrastruktur terbaik, produktivitas tenaga kerja yang tinggi, potensi pasar yang besar, extensive supply chain serta pelayanan investasi terbaik. (SOURCE)

May, 15 2024

West Java's 2026 Economic Growth Target Set at 6 Percent, Experts Warn of Global Challenges and Investment Equity

KORANMANDALA.COM – The West Java Provincial Government is targeting economic growth in the range of 5.5 to 6 percent in 2026. This target is higher than the current national economic growth average of 5.2 percent. This optimism is based on several economic indicators at West Java, which are considered quite solid. Mochammad Rizaldy Insan Baihaqqy, a lecturer and economics observer at the Nusantara Islamic University (Uninus), believes this target is still realistic, even though Bank Indonesia's projections for West Java predict economic growth in the range of 4.9 to 5.7 percent. According to Rizaldy, West Java has several key assets to support relatively high economic growth. One example is West Java's economic growth in the third quarter of 2025, which exceeded the national figure, at 5.20 percent. "Furthermore, West Java's export performance continues to show a positive trend, despite being overshadowed by global economic dynamics and uncertainty," said Rizaldy. He added that infrastructure development and investment realization are also important supporting factors. Several strategic projects, such as Kertajati Airport, toll road construction, and improved logistics connectivity, are considered capable of strengthening economic production and distribution activities. Rizaldy also highlighted the role of the manufacturing industry, which contributes nearly 40 percent to West Java's Gross Regional Domestic Product (GRDP) and remains a major driver of growth. Meanwhile, investment realization, both Foreign Direct Investment (PMA) and Domestic Direct Investment (PMDN), has shown better performance compared to the previous period. However, he cautioned against several challenges that need to be anticipated. West Java's dependence on the global market makes the export sector vulnerable to a global economic slowdown. Furthermore, the economic structure, still dominated by the manufacturing sector, requires strengthening household consumption and the service sector for more balanced growth. Regional risks such as natural disasters, as well as a tight national fiscal policy, also have the potential to suppress public purchasing power and impact the investment climate. "To achieve growth of up to 6 percent, investment alone is not enough. What's more important is how that investment can create jobs and stimulate household consumption," explained Rizaldy. He noted that the contribution of household consumption to West Java's GRDP remains around 55 percent. Therefore, strengthening the purchasing power of the public, MSMEs, and the service sector is key to achieving higher economic growth targets. Acuviarta Kartabi, an economic observer from Pasundan University, expressed a similar view. He assessed that West Java's economic prospects for 2026 remain quite positive, as inflation remains relatively controlled. According to data from the West Java Central Statistics Agency (BPS), year-on-year inflation in December 2025 was recorded at 2.63 percent, with a Consumer Price Index (CPI) of 110.15. "If economic growth improves and inflation remains stable, future wage policies have the potential to positively impact worker welfare," said Acuviarta. In the third quarter of 2025, West Java's economy, measured by GRDP at current prices, reached IDR 759.80 trillion, while GRDP at constant 2010 prices was IDR 461.90 trillion. On an annual basis, West Java's economy grew 5.20 percent compared to the same period the previous year. From the production side, the corporate services sector recorded the highest growth at 16.37 percent. Meanwhile, from the expenditure side, Gross Fixed Capital Formation (GFCF) was the component with the highest growth, at 5.27 percent. Based on annual growth sources, the manufacturing industry contributed the largest share of production, at 1.35 percent. From the expenditure side, household consumption contributed the most, contributing 2.91 percent. Acuviarta estimates that West Java's economic performance in the fourth quarter of 2025 will be better than the previous quarter, driven by various year-end policies, including the acceleration of infrastructure projects. However, he believes the West Java Provincial Government still has significant work to do, particularly in terms of equitable investment distribution. According to him, investment should not be concentrated solely in northern regions such as Bogor, Depok, Karawang, Bekasi, and Greater Bandung. "The southern part of West Java also needs more attention, particularly in terms of infrastructure development," he said. In addition to equitable investment distribution, Acuviarta assessed that policy stimulus for the business sector, particularly industry, is still suboptimal. He highlighted the lack of specific policies to protect certain industrial sectors, such as textiles and textile products (TPT). "Going forward, regional governments need to be more serious about preparing concrete policies to maintain the sustainability of strategic industrial sectors," he concluded. [SOURCE]

Jan, 08 2026

BI remains optimistic that West Java's economic growth in 2023 will be according to predictions, even though it will weaken

Bisnis.com, BANDUNG -- Bank Indonesia West Java explained the causes of weakening economic growth in West Java in the third quarter of 2023. Based on data released by the West Java Central Statistics Agency (BPS), West Java's economy in the third quarter of 2023 grew by 4.57% (yoy). This growth slowed compared to the previous quarter which reached 5.25% (yoy). Head of the West Java Bank Indonesia Representative Office, Erwin Gunawan Hutapea, said that this slowdown was caused by still weak export demand which had an impact on decreasing the performance of the processing industry sector as the main contributor to the West Java economy. Apart from that, the contracting growth in government spending has also become a barrier to higher economic growth. Furthermore, El-Nino, which affects the performance of the agricultural sector, also holds back the acceleration of West Java's economic growth in the third quarter of 2023. From the demand side, the source of West Java's economic growth in the third quarter of 2023 is driven by growth in household consumption of 5.83% (yoy), consumption of Household Non-Profit Institutions (LNPRT) of 21.17% (yoy), as well as investment of 8.40% (yoy). The increase in household consumption is driven by community mobility which remains high, especially in tourism activities and maintained people's purchasing power. This is reinforced by the results of the Bank Indonesia Consumer Survey, namely the Consumer Confidence Index, which remains recorded at an optimistic level of 106.17 in the third quarter of 2023. "Apart from that, the high level of various preparatory activities for the 2024 General Election will also have a positive impact on LNPRT consumption performance in West Java," he said, Tuesday (7/11/2023). Furthermore, investment realization in West Java until the third quarter of 2023 reached IDR 153.2 trillion, which is also the highest nationally. In terms of the business sector, West Java's economic growth is still positive, supported by increased performance in several sectors, including the transportation and warehousing sector (12.44% yoy), the food and drink accommodation provision sector (7.76% yoy), the construction sector (5 .88% yoy) as well as the wholesale and retail trade sector (4.32% yoy). The positive performance of the construction sector is in line with the construction of several government projects (Japek Sisi Selatan II Toll Road and various dams). "Apart from that, the performance of the construction sector is also supported by private projects that are still ongoing to meet year-end targets," he said. On the other hand, increasing community mobility driven by tourism activities has a positive impact on improving the performance of the transportation & warehousing sector as well as the food & drink accommodation provision sector. This is confirmed by the growth in airplane passengers (Husein Sastranegara & Kertajati Airport) which was recorded at 57% (yoy), an increase from the previous quarter (32.5% yoy). Apart from that, West Java's Room Occupancy Rate (TPK) was 42.83% in the third quarter of 2023, higher than the second quarter of 2023 (38.98%). "This also has an impact on retail sales which drives the performance of the wholesale and retail trade sectors in West Java," he explained. He assessed that in 2023, West Java's economy is expected to continue to grow positively in the range of 4.7-5.5% (yoy). "This optimism is supported by strengthening domestic demand, where people's mobility in 2023 will be higher than the previous year, as well as the momentum of the political safari which has started in the third quarter of 2023," he explained. In the future, synergy and collaboration need to continue to be strengthened, especially alignment of work programs with all stakeholders. According to him, various efforts need to continue to be made to increase domestic economic resilience, including through optimizing the realization of regional spending, encouraging investment promotion, encouraging the acceleration and expansion of digitalization. "Also ensuring the wheels of the economy run smoothly through holding various events/exhibitions to support MSMEs, as well as continuing to encourage the optimization of connectivity infrastructure to increase economic equality in West Java," he said. (SOURCE)

Nov, 28 2023

Poland Opens Investment Opportunities in West Java's Energy-Agriculture

Bandung (ANTARA) - Acting Polish Ambassador to Indonesia Maciej Tumulec said that his party opened up opportunities to bring industry from the European country to invest in West Java in the renewable energy sector, vocational education, and the provision of agricultural machinery. In his meeting with the Acting Governor of West Java Bey Triadi Machmudin, on the sidelines of the 2024 West Java Investment Summit (WJIS) in Bandung, Thursday, Maciej expressed his interest in investment offers from West Java, such as in the field of renewable energy, especially in solar and geothermal energy which have great potential. . Then there is cooperation in the vocational education sector in an effort to increase the capacity of vocational schools, including students so they can match with the industrial world. As well as investment in the agricultural machinery sector, one of which is drying equipment as an effort to support the West Java Provincial Government's targets for certain commodities. When met after the meeting, Maciej admitted that apart from these sectors, he saw that West Java had several other potentials that were very attractive for investors to invest in. "In the meeting I wanted to explore the possibility of us investing in West Java which I see is very attractive for investors in the future. I see there are several sectors that are also interesting such as tourism, also electric vehicles, the agricultural sector, especially food processing where we are strong there, "Then waste management, I invite the Governor to explore this potential," said Maciej to ANTARA. Maciej admitted that currently they have invested in various Southeast Asian countries such as Vietnam, Malaysia, Singapore and the Philippines, but he still sees Indonesia as an attractive country for Polish industry. "And through WJIS 2024, we want to show that Indonesia is an interesting country for us because it has a very large population and economic dynamics. Therefore we hope that investors will also come here and see the possible investment potential that exists, including in education such as what was said earlier," he said. Despite various observations of the existing potential and the hope that investors in his country can invest in Indonesia, Maciej revealed that the decision regarding investment certainty rests with the investors themselves. "However, investors in Poland see Indonesia as a potential country for investing in various fields," he said. It is known that WJIS 2024 will be a presentation event for various strategic projects that are ready to be funded by investors covering various future needs. These strategic projects include the Water Supply System Project, Environmentally Friendly Energy Project, New Investment Area Project, Downstream Industry Project, as well as Agroindustry and Circular Economy. The investment realization targeted in the 2024 WJIS event is IDR 117.6 trillion, from 40 ready-to-work projects offered by West Java. (SOURCE)

Sep, 23 2024

Investment in Cirebon reached IDR 939.8 billion in the first quarter of 2024

"Investment realization in Cirebon has only reached 29.06 percent of the target set in 2024 of IDR 3.23 trillion" Cirebon (ANTARA) - Investment realization in Cirebon Regency, West Java, reached IDR 939.8 billion in the first quarter of 2024 with the most dominant sector for investment being the industrial sector. "Investment realization in Cirebon has only reached 29.06 percent of the target set for 2024 of IDR 3.23 trillion," said Head of the Cirebon Regency Investment and One-Stop Integrated Service (DPMPTSP) Dede Sudiono in Cirebon, Monday. Based on data, he said, the highest investment realization occurred in the leather goods and footwear industrial sector, which reached IDR 82.93 billion. Then, the rubber and plastic industry also made a significant contribution to investment realization in Cirebon Regency, namely around IDR 67.65 billion. Dede said that positive results were also seen in the chemical and pharmaceutical industry, with realized capital investment recorded at IDR 49.61 billion. "For other industrial sectors, we recorded investment achievements reaching IDR 166.62 billion," he said. Apart from industry, according to him, quite large investment figures also occurred in other service sectors with a realization of IDR 142.57 billion, followed by the housing, industrial area and office sectors of around IDR 73.06 billion. Dede explained that to achieve the target by the end of 2024, his party has implemented various policies that make investment easier in Cirebon Regency, one of which is by implementing integrated licensing, so that investors can invest capital in several potential sectors in Cirebon Regency. “Licensing can now be done digitally. "So it makes it easier for investors to invest their capital," he said. He added that with a good investment climate, it will be able to open up job opportunities for residents so that it will also have an impact on reducing the unemployment rate. "During the first quarter of this year, investment activities could absorb up to 3,322 local workers in Cirebon Regency. "Meanwhile, foreign workers only make up 15 percent," he said. (SOURCE)

Jun, 13 2024

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