Competition in artificial intelligence is no longer defined solely by who produces the most popular applications. The infrastructure behind AI—including data centers, energy supply, advanced chips, computing capacity, and skilled workers—is increasingly determining how countries participate in the global AI economy.
Indonesia’s Ministry of Communication and Digital Affairs has warned that this shift deserves urgent attention. Deputy Minister Nezar Patria said Indonesia must strengthen its technological foundations if it wants to become more than a user and market for foreign AI products. He delivered the message during a workshop on AI infrastructure readiness, regulation, and socioeconomic impacts in Jakarta on July 14, 2026.
Infrastructure Is the New Competitive Battleground
The first wave of generative AI drew public attention to chatbots and applications powered by large language models. Developing and operating those services, however, requires significant resources. AI models depend on high-performance chips, large-scale data centers, reliable electricity, cooling systems, fast networks, and access to cloud or specialized computing platforms.
Countries and companies that control critical parts of this infrastructure gain greater bargaining power. Heavy dependence on foreign chip suppliers, cloud platforms, or computing providers can limit a country’s ability to develop technology according to its own economic and public-policy priorities.
For Indonesia, the challenge is therefore larger than attracting investment in data-center buildings. More economic value can be captured when domestic companies and workers also participate in technology development, infrastructure operations, supply chains, and the creation of AI systems.
Mineral Resources Must Be Matched by Technological Capability
According to the ministry’s official statement, Indonesia is estimated to hold roughly 340 million metric tons of silica sand reserves. Silica is among the materials used in semiconductor production. This resource could provide strategic leverage, but raw-material availability alone will not automatically give Indonesia a strong position in the technology industry.
Downstream industrial policy needs to generate local value, transfer knowledge, and expand domestic technical capabilities. Without mastery of processes and technology, Indonesia could remain concentrated in lower-value segments while advanced manufacturing and product development take place elsewhere.
Cooperation among government agencies, universities, businesses, and international partners will be required to build a connected ecosystem. Investment policy should encourage skills development, research, and local participation instead of focusing exclusively on the construction of physical facilities.
Energy and Talent Are Equally Important
AI-focused data centers require substantial and stable electricity supplies. Energy readiness must therefore become part of the country’s digital strategy. New computing infrastructure should be accompanied by careful energy planning, higher efficiency, and responsible management of environmental effects.
Hardware will also deliver limited benefits without people who know how to develop and operate it. Indonesia needs semiconductor engineers, data-center specialists, AI researchers, cybersecurity professionals, network engineers, and other technical workers across the digital infrastructure stack.
Education and training programs must be aligned with these needs. Building AI talent should go beyond teaching people how to use existing tools. It also requires deeper expertise in computing, chip design, networks, security, data governance, and the responsible management of emerging technologies.
Indonesia’s Position Is Being Decided Now
The global shift toward infrastructure creates both opportunities and risks. Indonesia has a large domestic market, strategic natural resources, energy potential, and a young population capable of supporting a technology workforce. Turning those advantages into industrial capability, however, will require long-term coordination and consistent policy.
The decisions made today will determine whether Indonesia primarily becomes a location where foreign technology is consumed and operated, or whether it can capture higher-value roles in the global AI supply chain. Stronger infrastructure, responsible downstream development, skilled talent, and international cooperation can form the foundation for greater technological resilience.
Sources:
1. Ministry of Communication and Digital Affairs of the Republic of Indonesia — “Persaingan AI Kini Ditentukan Infrastruktur, Bukan Sekadar Aplikasi,” July 15, 2026: https://portal.komdigi.go.id/kanal-publik/berita-kini/10397
2. ANTARA News — “Nezar: Infrastruktur AI perlu diperkuat guna tingkatkan daya saing,” July 16, 2026: https://www.antaranews.com/berita/5652880/nezar-infrastruktur-ai-perlu-diperkuat-guna-tingkatkan-daya-saing
