Indonesia seeks to become AI investment destination

Indonesia is encouraging and inviting information and communications technology (ICT) investors to help position the country as a prime destination for artificial intelligence (AI) investment.

Indonesia's Minister of Communication and Informatics Budi Arie Setiadi said AI's contribution to this ASEAN economy surged from $1 billion in 2020 to $11 billion in 2022. While AI investment destinations are currently dominated by the U.S., China, and the UK, the digital sector in ASEAN continues to grow rapidly, with increasing investments in ICT.

The official also urged participants in Indonesia's national digital ecosystem to seize the opportunities for AI development as both a solution and an initiative. In 2023, the country’s digital sector attracted around $22 billion in investment.

By 2030, the market potential is projected to reach between $210 billion and $360 billion, driven by significant growth in e-commerce, online travel, transportation, the food industry, and online media. AI is expected to contribute $366 billion to Indonesia's economy by 2030, fueling future economic growth.

Additionally, AI is anticipated to offer solutions across various sectors in developing countries, including education, healthcare, public services, finance, and labour. Access to AI-powered digital services can improve through enhanced public information and services, particularly in rural and remote areas of Indonesia.

AI also holds the potential to boost economic productivity through automation and innovation, enabling small and medium enterprises (SMEs) to compete in the digital era.

Setiadi also acknowledged several challenges that must be addressed for Indonesia to become a competitive AI investment destination. These include uneven infrastructure development and limited funding, which hinder internet penetration - a key driver for AI development.