Powering Indonesia’s Digital Transformation: The Promise of Nuclear Energy for Future Data Centers
Data is a valuable asset in the digital age. Indonesia, the largest country in ASEAN with the largest population, is now preparing to transform towards a digital technology infrastructure, including the adoption of Artificial Intelligence (AI), cloud computing, and the Internet of Things (IoT) across various sectors. This initiative to drive digitalization will make data centers key players in securely and efficiently storing, managing, and distributing digital data. Not only that, the development of the data center industry in Indonesia also offers promising potential. According to Mordor Intelligence, Indonesia's data center market is projected to grow at a Compound Annual Growth Rate (CAGR) of 14% to reach US$3.98 billion by 2028, with power capacity continuously projected to increase.
The development of data centers, as the core of digital transformation and an economic driver, is closely linked to the need for large-scale, stable, and reliable power. Indonesia's current reliance on fossil fuels has impacted carbon emissions, making them an unsuitable solution for providing power and baseload supply, especially as national electricity demand is projected to increase significantly until 2050. This also aligns with Indonesia's Net Zero Emissions (NZE) target by 2060 and the urgency of a clean energy transition. In addition, the use of intermittent renewable energy sources is also not a practical solution due to their unstable and unreliable nature for continuous data center operations.
Global tech giants, such as Amazon, Google, Meta, and Microsoft, have undoubtedly considered this. The surge in energy demand due to the growth of data centers and AI has led them to shift investments from traditional renewables to nuclear energy, particularly Small Modular Reactors (SMRs) and microreactors, to meet the 24/7 electricity needs of data centers. Microsoft even revived the Three Mile Island reactor. This move demonstrates that nuclear energy is becoming a strategic solution for the future of the technology sector and for achieving NZE targets. So, how can nuclear energy empower data centers in Indonesia, and what are the next steps?
Data Center Development in Indonesia
Indonesia's data center industry is predicted to experience significant growth in the next three to five years, supported by the increasing need for big data processing in sectors like e-commerce, public services, and fintech. The data center infrastructure being developed in Indonesia, known as AI-Ready Data Centers, is designed to optimally support AI workloads. To date, several technology companies have established data centers in Indonesia.
Microsoft officially launched its Indonesia Central Cloud Region, its first data center in Indonesia, which was positively received by the Minister of Communication and Digital Affairs of the Republic of Indonesia, Meutya Hafid. This project is part of a USD 1.7 billion investment commitment and is expected to have an economic impact of up to USD 2.53 billion, while also creating 60,000 jobs by 2028. This launch reflects confidence in Indonesia's digital policy direction and national readiness to manage advanced technologies like cloud and AI to become a hub for the Asia-Pacific digital economy, leveraging geographical advantages and significant renewable energy potential.
Oracle: The Ministry of Communication and Digital Affairs of the Republic of Indonesia has partnered with Oracle to build a giant Graphics Processing Unit (GPU) cluster to strengthen the national AI infrastructure, which is set to begin operations in the third quarter of 2025. This collaboration also includes AI training for over 100,000 citizens, including students, workers, and government officials, to support public service programs and the creative industry.
Biznet announced the construction of the first AI-Ready Data Center in Bali, targeted for completion by October 2025, to strengthen the national digital ecosystem and serve as a sustainable collaborative platform for innovators. This facility will be a high-capacity data processing center and an AI technology development laboratory featuring cutting-edge technologies like high-power electrical systems, a low Power Usage Effectiveness (PUE) score, and liquid cooling.
Equinix collaborated with Astra International: They have inaugurated a new data center named JK1 Jakarta International Business Exchange (IBX) in Jakarta to drive AI development and strengthen Indonesia's digital ecosystem. It is equipped with liquid cooling technology and energy-saving systems to support high-density workloads and promote environmental friendliness. This investment is expected to be a strategic step that reinforces Indonesia's position as a global investment magnet in the data center sector, while also supporting digital transformation, local talent development, and enhancing national economic competitiveness.
PT SMPlus Digital Investama (SM+), supported by Sinar Mas and partnered with Korea Investment Real Asset Management (KIRA), officially began construction of an AI-Ready data center called SMX01 in Jakarta's Central Business District with an investment of IDR 4.9 trillion (approximately USD 300 million) and is scheduled to operate in the second half of 2026. It will have an initial capacity of 18 MW, expandable up to 60 MW, supporting up to 2,400 racks across 9 data halls, designed to meet high-computing needs such as AI and machine learning. SMX01 incorporates advanced technologies like air cooling and liquid cooling systems, along with an energy-efficient design, green building certification, and Tier IV security standards.
NeutraDC, a subsidiary of PT Telkom Data Ekosistem, is building an AI-Ready data center in Indonesia as part of efforts to accelerate AI democratization and support data localization policies in accordance with Government Regulation No. 71 of 2019. This facility is designed to serve government, private, and global business sectors, capable of handling high data loads up to 100 kW, and implementing the latest technology and multi-layered cybersecurity systems. NeutraDC reaffirms its commitment to global standards and local regulations to ensure the readiness of Indonesia's digital infrastructure in facing the surge in AI-based data processing needs.
Potential of Nuclear Energy for Data Centers in Indonesia
In its commitment through the Electricity Supply Business Plan (Rencana Usaha Penyediaan Tenaga Listrik, RUPTL) 2025-2034, Indonesia has mapped out a plan to build its first Nuclear Power Plant (NPP) in 2032 and 2033 with a total capacity of 500 MW, divided into two plants of 250 MW each, to be constructed on the Sumatra and Kalimantan grid systems. The document also states that the use of NPP technology in Indonesia is not limited to SMRs but also includes large scale, medium scale, Pressurized Water Reactors (PWR), Boiling Water Reactors (BWR), floating, land-based, and others, while still meeting safety, security, and safeguards requirements, and adhering to national and international standards. Additionally, the establishment of a Nuclear Energy Program Implementation Organization (NEPIO) will be pursued by the Ministry of Energy and Mineral Resources (MEMR).
The implementation of nuclear energy as a clean, scalable, stable, and reliable energy for Indonesia's energy future has become a momentum, opening strategic opportunities for data center power supply, which is projected to continuously increase in the coming years. Furthermore, the National Energy Council (Dewan Energi Nasional, DEN) has mapped 29 potential locations for NPP construction in Indonesia, spanning from Sumatera to Papua, with a total power capacity reaching 54 GW.
Indonesia's potential in adopting Floating Nuclear Power Plant (FNPP) technology through international cooperation also opens new opportunities for equitable electricity distribution across its archipelagic regions, aligning with efforts to support data center development in various areas. Therefore, a well-planned NPP construction, targeted to operate in less than a decade, is expected to keep pace with the projected significant growth of data centers within the next five years. This will enable the balance between digital transformation, clean energy transition, and the achievement of NZE targets to be realized.
What Should Indonesia Do Next?
The rapid growth of Indonesia's digital industry has triggered a surge in electricity demand for data centers, which requires an uninterrupted, stable, and clean energy supply, a need perfectly suited to the characteristics of nuclear energy. With its diverse potential and strong commitment, Indonesia can prove its role as a leader in ASEAN's digital transformation and a pioneer in sustainable nuclear energy development for the future.
In realizing this grand collaboration, Indonesia needs to move in parallel, preparing both its digital infrastructure and nuclear energy development. Challenges in determining the right technology, energy economics, and regulatory framework are crucial factors that must be addressed. Furthermore, consistent support from the government and stakeholders is essential to drive continuous technological advancement. The potential contribution of nuclear energy to data center development is not just about building infrastructure, but also about shaping a resilient and sustainable energy ecosystem in the digital era. For this, close cooperation among the government, industry, investors, and the public is key to fulfilling the promise of nuclear energy for Indonesia's digital future.
