Indonesia targets foreign investment with new AI roadmap, official says

New Straits Times

7 days ago

JAKARTA: Indonesia will finish work next month on its first national strategy on artificial intelligence (AI) in a bid to attract foreign investment, an official said, as Southeast Asia's largest economy looks to join the global AI and chip-making race.
The move follows neighbouring Malaysia's push to establish itself as a regional hub for AI development, securing billions of US dollars from global tech firms seeking to build critical infrastructure to meet growing demand for cloud and AI services.
Indonesia's AI roadmap will be the first comprehensive AI document in the country — the fourth largest in the world by population — since a smaller ethics guideline in 2023, Deputy Minister of Communications and Digital Nezar Patria told Reuters in an interview at his office on Monday.
"The roadmap will help AI developers navigate (Indonesia's market), including on infrastructure and also on computational clusters," he said, adding that it would detail AI adoption in sectors such as health and agriculture.
Nezar said the roadmap was designed to establish the country's AI ecosystem.
"This will give an idea to investors about the potential of AI use in Indonesia," he said. "We're hoping they are interested in investing their capital in Indonesia."
An April report by Boston Consulting Group said Asean nations were positioned for substantial AI-driven gains, with GDP contributions ranging from 2.3 to 3.1 per cent by 2027, and Indonesia projected to see the highest impact in terms of absolute gross domestic output growth.
But despite some investments, development has been slow in Indonesia compared to other parts of the region.
Nvidia was involved with Indonesia's biggest tech company GoTo Gojek Tokopedia for a large language model service last year, and supplied its chips to the telecommunications company Indosat.
Microsoft also said last year it would invest US$1.7 billion over the next few years into expanding cloud services and AI in Indonesia.
"We're opening up to all global tech companies to get into the industry of AI development in Indonesia," Nezar said.
Separately, Indonesia is also pitching foreign firms on its critical minerals, which are needed for hardware development, in order to secure a bigger share of the global semiconductor supply chain, he added.
Indonesia has offered the United States the chance to jointly invest in a critical minerals project as part of its tariff negotiations. Washington has sought to find alternative suppliers to China, which dominates the sector but in April added some rare earths to its export restriction list in retaliation for US tariffs.
Damar Juniarto, an analyst from research centre PIKAT Demokrasi, which monitors AI safety in Indonesia, said the country was not ready to be an AI developer owing to a lack of infrastructure such as chips, and a lack of AI skills in the workforce.
Nezar said there remained risks of misinformation, intellectual property and data leaks. He did not detail how the roadmap would address those issues.