Southeast Asia, particularly Indonesia, is poised to become a key player in the development of artificial intelligence (AI) technologies. With a digital economy growing at an accelerated pace and a population nearing 280 million, Indonesia’s potential as a hub for AI innovation is immense. A rapidly expanding demand for AI-driven applications, including generative AI platforms like ChatGPT, signals a promising future for this sector.

The growth of Indonesia's digital economy is one of the main drivers of the increasing demand for data center services. According to Stephanus Oscar, CEO of Edge DC—an internet service provider under Indonet—the country’s digital transformation is acting as a catalyst for a surge in AI workloads, which in turn fuels the need for scalable data centers to support these applications. Oscar highlights that the Southeast Asian market, valued at around $86.9 billion in 2023, is expected to skyrocket to $407 billion by 2027, reflecting a compound annual growth rate (CAGR) of over 30%. This growth creates a significant opportunity for companies that can provide the necessary infrastructure to power AI services.

Industries ranging from e-commerce and finance to healthcare and manufacturing are increasingly dependent on AI technologies to enhance operations. E-commerce companies leverage AI for product recommendations and fraud detection, while financial institutions use AI to improve customer service, risk management, and fraud prevention. In the healthcare sector, AI is revolutionizing diagnostic imaging, drug discovery, and personalized treatments, while industries like agriculture and manufacturing use AI for process optimization and predictive analytics.

As AI applications become more pervasive and sophisticated, the demand for high-performance computing (HPC) models grows. These models require massive computing power, leading to a significant increase in energy consumption, especially within data centers. According to a McKinsey report, energy consumption by data centers is expected to more than double by 2030, from 17 gigawatts in 2022 to 35 gigawatts annually. The growing energy needs of AI workloads are pushing companies to seek innovative solutions that not only meet these demands but also align with sustainability goals.

In response to these challenges, Edge DC has been at the forefront of developing energy-efficient solutions. The company recently launched its second data center, EDGE2, in early 2024. Located in South Jakarta, EDGE2 is a hyperscale data center designed to support AI applications that demand high IT loads, with a capacity of 23 megawatts (MW). The facility features cutting-edge cooling technology, such as State Point Liquid Cooling (SPLC), which directly removes heat from servers using specialized liquids. This method not only reduces water usage but also lowers energy consumption, making EDGE2 one of the most efficient facilities in Indonesia.

Moreover, EDGE2 is designed with sustainability in mind. The facility is the first in Indonesia to operate using 100% renewable energy certificates (REC). The SPLC system further reduces the environmental impact, conserving around 140 million gallons of water annually compared to traditional cooling methods.

Another factor that makes Indonesia attractive for AI and data center expansion is its robust infrastructure. Edge DC’s data centers are strategically located near major Internet Exchange Points (IXPs), which enable low-latency connectivity and support the growing need for fast, secure data transmission. The company’s data centers are designed to cater to businesses requiring high-performance connectivity, particularly those involved in AI, which demand near-zero latency for real-time processing.

Indonesia's growing network of underwater cables, combined with access to affordable, reliable energy, makes it an ideal location for the expansion of AI technologies and data centers. This infrastructure is expected to play a pivotal role in positioning Southeast Asia as a leading hub for AI innovation.

KOMPAS.COM