Microsoft opens first data centre in Indonesia, betting big on AI and cloud growth

JAKARTA: Microsoft has opened its first data centre in Indonesia, a milestone that reflects the tech giant’s growing focus on Southeast Asia and the region’s accelerating digital transformation. 

The new facility, known as the Indonesia Central Cloud Region, was officially launched on Monday in Jakarta. The inauguration ceremony was attended by the country’s Minister of Communication and Digital, Meutya Hafid, who represented President Prabowo Subianto. 

Calling the launch a “testament to Indonesia’s digital sovereignty”, Meutya said the development signals growing global trust in the country’s digital policies and its capacity to manage cutting-edge technologies like artificial intelligence and cloud computing. 

“This is a testament to our commitment to digital sovereignty and technological progress,” she said during the event. 

Microsoft’s entry into the Indonesian cloud market comes with a sizeable investment of US$1.7 billion, which is expected to generate US$2.5 billion in economic impact and create around 60,000 jobs by 2028. Alongside the infrastructure, the company also aims to train 1 million Indonesians in digital skills. So far, over 840,000 have already taken part in its AI training programmes. 

Indonesia is now the second-largest data centre market in Southeast Asia, with 84 facilities, just behind Singapore, which has 99. The arrival of Microsoft adds further momentum to a trend already shaped by other tech giants like Amazon and Google, both of which have expanded their cloud presence in the region. 

While Southeast Asia has seen rapid digital growth, its cloud infrastructure still lags behind more developed markets. Countries like Indonesia are increasingly seen as attractive alternatives to Singapore, which faces land and energy limitations. Indonesia’s abundant renewable energy resources and central location have made it a natural destination for data centre investments. 

Data localisation laws have also played a crucial role. Governments across the region, including Indonesia, are tightening regulations that require data to be processed within national borders. This shift has pushed global firms to establish physical infrastructure locally. 

According to industry projections, the Southeast Asian data centre market is expected to grow from US$10.23 billion in 2023 to US$17.73 billion by 2029. Microsoft’s expansion highlights how data centres are becoming critical drivers of economic development, job creation, and digital innovation. 

With monthly data consumption in the region forecast to triple by 2025, investments in cloud services are expected to continue rising, reshaping Southeast Asia’s digital landscape for years to come. 

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