Indonesian Minister of Communication and Digital Affairs Meutya Hafid meets with Indosat Ooredoo Hutchison CEO Vikram Sinha at the Ministry office in Jakarta, on August 7. (Indonesian Ministry of Communication and Digital Affairs).
This initiative was sealed on August 7, following a discussion between Indonesian Minister of Communications and Digital Affairs Meutya Hafid and the IOH Chief Executive Officer in Jakarta. According to the minister, this plan was first proposed two years ago and “has now reached its final stage and can be officially announced to the public”.
Minister Meutya said that “the presence of the AI Factory will strengthen Indonesia’s position as a regional AI hub because it will be able to serve both domestic and regional demand”.
Construction is set to begin in the first half of 2027 with an initial capacity of approximately 200 megawatts (MW) in Central Java province. Over a three-year development period, Zankore is projected to attain one gigawatt (GW) of computing capacity, making it the biggest in the region.
“The investment reflects growing global confidence in Indonesia’s digital economy while reinforcing the country’s position as a destination for high-value technology investment,” Minister Meutya added.
Additionally, Zankore will develop Sahabat-AI, a 70-billion-parameter open-source large language model supporting bahasa Indonesia and regional languages, including Javanese, Sundanese, Balinese and Batak. A Token-as-a-Service platform for affordable access is also being built, to help small businesses and developers avoid the prohibitive cost of buying expensive AI servers. It will be enabled through shared infrastructure connected to Zankore’s supercomputers.
What does this mean for businesses?
The AI Factory will serve as a specialised data centre built entirely to manufacture intelligence, running continuous data through massive supercomputers to create and refine AI models. Unlike regular data centres that act as digital storage lockers or website hosts, an AI factory behaves like a heavy-industrial manufacturing plant for software. It indeed signals an optimistic future for Indonesia. However, several risks must still be taken into account. With America’s NVIDIA backing the architecture, the infrastructure remains exposed to shifting global geopolitics and semiconductor export controls. Furthermore, though the three-year timeline presents an ambitious vision, Indonesia must develop the specialised local talent required to run them (an area the government has yet to fully outline) whilst immense clean energy grid demands pose a critical environmental challenge.
As regional superpowers race to secure computing sovereignty amidst complex infrastructure and geopolitical risks, Kala Advisory helps investors turn openings like these into targeted, country-by-country entry plans across Southeast Asia; visit kala-advisory.com.
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