Indonesia is planning to set up a sovereign AI fund to accelerate its ambition of becoming a regional leader in artificial intelligence, according to a government document. The proposal is part of the country’s first national AI roadmap, aimed at attracting foreign investment and positioning itself in the global AI and chip-making race.
Neighbouring Malaysia has already secured billions of dollars from global technology companies to build infrastructure for cloud and AI services. Indonesia’s 179-page white paper recommends that the AI fund be managed by the sovereign wealth fund Danantara Indonesia, which holds over 900 billion dollars in assets.
The document does not mention how much money will be required but suggests launching the fund between 2027 and 2029 through a public and private sector partnership. It also advises offering more fiscal incentives to domestic AI investors, although details have not been provided.
The strategy paper, which is still open for public feedback before its final version, maps Indonesia’s readiness for AI and outlines policy recommendations until 2030. “Indonesia right now is in the early stages of AI adoption,” the document states. Contributions to the report came from major industry players, including Chinese technology company Huawei and Indonesia’s largest tech firm GoTo.
A recent report by a global consulting firm suggests ASEAN countries could gain between 2.3 and 3.1 per cent in GDP from AI by 2027, with Indonesia expected to see the largest growth in absolute terms.
The roadmap also highlights key challenges such as a shortage of skilled professionals, low research funding, poor internet connectivity in rural areas, and risks related to misinformation and data leaks.
Several global technology companies, including Nvidia and Microsoft, have shown interest in supporting Indonesia’s AI development plans.
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