US-based cloud applications and platform multinational Oracle is considering creating a cloud services centre in Indonesia and is in discussions with the government, people familiar with the matter told Bloomberg News. The potential investment would occur in Batam, an island to the north of Indonesia and the south coast of Singapore.
Batam already houses several other data centres in Nongsa Digital Park, which its website describes as “an ideal site for digital businesses to grow” and “data centre development.” It says its location, far away from seismic fault lines and on the high topography of Eastern Batam, makes it a “much safer geographical location for data centres.”
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It also has access to 13 international submarine fiber optic cables, linking it to parts of Indonesia, Singapore and the US’s west coast. Access to the these submarine cables enables faster data transfer from the data centres to the internet infrastructure.
Oracle is just one of many major tech companies building essential infrastructure for the development of artificial intelligence in Southeast Asia. A confluence of cheaper inputs, welcoming governments, and relative political stability has allowed the region to attract record-breaking foreign direct investment (FDI) levels while flows decrease in most other parts of the world.
In 2024, Oracle announced plans to invest $6.5bn in Malaysia to build a cloud region. It was the ninth-biggest FDI deal that year. The company also already has two cloud computing centres in Malaysia.
The UN Conference on Trade and Development (UNCTAD) estimates that FDI flows into countries within the Association of Southeast Asian Nations (ASEAN) increased by 2%, reaching a record estimated $235bn in 2024.
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