Analysis: The hidden costs of Indonesia’s data center gold rush
Indonesia wants to ride the global data center boom, betting that investment, skilled jobs and computing power for artificial intelligence will drive economic growth. But the cloud leaves its imprint on the ground: Data centers consume vast amounts of electricity and water and can expose surrounding communities to heat and noise. The question is whether the government will make this boom work for…
Indonesia is capitalizing on the global data center surge, hoping investments will spur economic growth through skilled jobs and AI computing power. However, the practice entails significant environmental and social costs. Data centers guzzle large quantities of electricity and water, potentially polluting local air and disrupting community life.
In June 2025, Indonesia's capacity stood at 650 megawatts, with projections of 1.5–2 gigawatts by 2026. State utility PLN already linked 159 data center customers with nearly 2,000 megavolt-amperes of electricity, with an additional 2 GW slated for construction or expansion. While data centers generate economic gains, Indonesia must ensure its power infrastructure, water supplies, and surrounding areas can handle the influx.
The government must weigh these hidden costs against the benefits of attracting data centers faster than it can prepare the necessary infrastructure.
Written by urgent.news from The Jakarta Post Academia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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