The Indonesian Government wants companies doing business in its territory invest enough. If they don’t, they may have trouble continuing to offer some of their products or services. We have already seen it with the ban on sales of the iPhone 16 and the Pixel for lacking the so-called National Component Level Certificate (TKDN).
Tencent seems like it won’t have these kinds of problems. The Chinese technology giant has announced an investment of $500 million in Indonesia. These are funds that will cover the construction of its third data center in the region in a partnership with GoTo Group and Alibaba Group. But there are more investments that promise to reach this Southeast Asian country soon.
Indonesia receives more foreign investment
How RM.ID collectsthe announcement was made last weekend during a state visit by Indonesian President Prabowo Subianto to China. The 500 million dollars from Tencent are part of a package of foreign investments that promise to exceed 10 billion dollars. What will all this money be used for? To boost the cloud computing business.
The idea is that Southeast Asia’s largest economy can offer its companies and startups a more solid infrastructure in relation to all types of cloud services, including artificial intelligence (AI). This is within the framework of a program known as “Golden Indonesia 2045 Vision”, which seeks to consolidate the industry and service sectors in Indonesia for the centenary of the country’s independence.
GoTo, an Indonesian group, needs to rely on external partners on topics such as data analysis, artificial intelligence, cybersecurity and cloud infrastructure. Chinese companies such as Alibaba and Tencent take advantage of this need, but to operate in the country they have to comply with a series of strict requirements that translate into local investments, something that, as we have seen, the Indonesian Government pursues.
The data handled by both GoTo and its partners must remain stored in Indonesia. The only way to ensure this national data sovereignty requirement is to install more data centers in the country, as recently promised. Likewise, the Government has managed to close an agreement to train Indonesian workers in topics related to the “new global digital economy.”
Images | Gints Gailis
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