U.S.-based chip manufacturer Nvidia (NASDAQ: NVDA) has confirmed plans to establish an artificial intelligence (AI) center in Indonesia as it expands its reach in Southeast Asia.
In its announcement, the $200 million center will power Indonesia’s push into AI, providing infrastructure and talent for the digitization drive. Based out of Surakarta in Indonesia’s Central Java province, the facility is expected to begin operations in the coming years.
Nvidia has since inked a deal with local telecom provider Indosat to collaborate on the AI center, building on existing partnerships between both entities. In March, Indosat signaled an intention to leverage Nvidia’s latest range of chips in its offerings, citing myriad opportunities to usher Indonesia into “a new era of sovereign AI and technological advancement.”
The latest partnership with Nvidia received the approval of the Ministry of Communication and Information after regulators conducted due diligence over the arrangement.
In the end, parties agreed for the AI hub to be cited at Solo Technopark, given the existence of a strong 5G network in the region and a healthy talent pool to power the center.
“This collaboration is very strategic and we hope that there will also be technology transfer so that we are not just users, but can later become part of the AI players that are taken into account both regionally and at the global level,” said Deputy Minister of Communication and Information Nezar Patria.
Nvidia’s latest move underscores the company’s ambition to broaden its horizons outside the U.S. and China in the face of regulatory headwinds. Since the trade embargo imposed on China and certain Middle Eastern countries, Nvidia’s search for new markets has seen it hone in on Southeast Asia.
The chip manufacturer has inked deals with Singapore-based telecom giant Singtel to introduce AI functionalities into its data centers in the sub-region with startups turning to the technology for their hardware needs.
According to a filing with the U.S. Securities and Exchange Commission (SEC), Nvidia’s gamble in Southeast Asia has paid off. The region made up a chunk of Nvidia’s revenue in 2023, with Hong Kong, Taiwan, and Singapore contributing double-digit percentages.
Pursuing AI adoption
In 2022, Nvidia’s earliest foray in Indonesia saw the company pledge a fortune to equip citizens with digital skills, particularly AI and blockchain.
“If I’m not mistaken, in 2022 – 2023, Nvidia is also committed to helping educate nearly 20 thousand Indonesian students to improve their skills in the field of AI from the digital talent development section in Indonesia,” said Patria.
Back in the U.S., the hardware company has teamed up with the U.S. National Science Foundations to pursue a pilot program to set up industry standards for research infrastructure for industry players, pledging $30 million to achieve the goals.
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