Jauhn Etienne Villaruel

Article (news)

<div><span class="fr-img-caption fr-fic fr-dib" style="width:960px;display:block" width="960"><span class="fr-img-wrap"><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/1772077691980ismail-enes-ayhan-lVZjvw-u9V8-unsplash_cropped_processed_by_imagy.jpg" style="width:960px" class="fr-fic fr-dib" width="960"/><span class="fr-inner" style="text-align:left">📷༘ İsmail Enes Ayhan, Unsplash</span></span></span></div><div><br/></div><p>KARAWANG, Indonesia — Nonstop buzzing fills a windowless Microsoft data center near Jakarta, part of a tech construction boom sweeping Southeast Asia that promises economic opportunities but is also hungry for resources.</p><p>As demand for artificial intelligence heats up, technology giants are racing to invest billions of dollars in the region, attracted by a growing plugged-in user base.</p><p>New data centers -- warehouse-like facilities that store online files and power AI tools from chatbots to image generators -- are mushrooming worldwide, and the sector is growing particularly fast in Asia.</p><p>AFP was recently granted rare access to a Microsoft data centre in Indonesia that is part of the new boom. </p><p>No company logo was visible on the vast boxy exterior of the centre, and visitors were only admitted after careful security checks.</p><p>Keeping the systems whirring is a constant operation, with technicians on site even during religious holidays.</p><p>Data center capacity in Southeast Asia is projected to triple from 2025 levels by 2030, driven by a tenfold surge in AI use, according to a KPMG report.</p><p>&quot;We expect every app, every workload, every user to be using AI in some part of their workflow&quot; in just a few years, Alistair Speirs, a manager for infrastructure at Microsoft, told AFP.</p><p>But many of Asia&#x27;s data centers will add demand to grids still heavily reliant on planet-warming fossil fuels.</p><p>And to keep servers from overheating, they will place new pressure on often-stretched local water supplies.</p><div><br/></div><div><strong>AI AT WORK </strong></div><div><br/></div><p>At the Indonesian data center, racks of metal-cased servers in tall white cabinets were busy answering AI queries for local users -- an intensive, heat-generating process.</p><p>A &quot;closed-loop&quot; water cooling system, which works a bit like a car radiator and does not require regular refills, prevents them from malfunctioning.</p><p>Higher performance chips &quot;require a lot more intensity&quot;, Noelle Walsh, head of the company&#x27;s cloud operations, told AFP.</p><p>&quot;We&#x27;ve had to adapt our data centers&#x27; designs to accommodate different power structures and different cooling mechanisms.&quot;</p><p>Super-connected Singapore was long Southeast Asia&#x27;s data centre hotspot, but the city state halted developments between 2019 and 2022 over energy, water and land use worries.</p><p>That, along with an explosion of AI interest after ChatGPT&#x27;s debut, brought a surge of data centers to neighboring Malaysia, and increasingly Thailand, Indonesia, the Philippines and Vietnam.</p><p>&quot;The boom is there,&quot; with companies racing for &quot;first-player advantage&quot;, said Trung Ghi of the consulting firm Arthur D. Little.</p><p>Hosting data centers is a &quot;win-win situation&quot; for governments, he said, noting it boosts business efficiency with faster online tools and grows local economies as people come to work at new tech parks.</p><div><br/></div><div><strong>HYPERSCALE </strong></div><div><br/></div><p>The data center expansion will increase demand on power grids that are still heavily coal dependent.</p><p>Power consumption by data centers in Indonesia -- where coal generates nearly 70 percent of electricity -- will likely quadruple by 2030, according to energy think tank Ember.</p><p>Microsoft&#x27;s Jakarta facilities, spread out to mitigate risks from earthquakes and floods, are part of a $1.7 billion investment with a potential &quot;hyperscale&quot; capacity that would need hundreds of megawatts of electricity.</p><p>The company says it works to &quot;green&quot; local grids by incentivizing energy transition plans.</p><p>&quot;We don&#x27;t build power plants, but we work with utility providers,&quot; Microsoft&#x27;s Walsh said.</p><p>&quot;In some parts of the world it is wind power, in other parts of the world it is solar, we also use hydropower, and in some countries it&#x27;s nuclear. So we support all of those.&quot;</p><p>Microsoft recently signed a deal with Indonesia&#x27;s state-owned electricity provider to raise the nation&#x27;s renewable energy capacity by around 200 megawatts over a decade.</p><div><br/></div><div><strong>SINKING CITY </strong></div><div><br/></div><p>Microsoft&#x27;s rivals Amazon and Google, as well as Chinese tech giants Alibaba and Tencent, also run data centers in the Jakarta region.</p><p>The metropolitan area of 42 million is sinking, partly due to groundwater extraction. Officials plan to eventually relocate the capital.</p><p>The data centre boom &quot;will put even greater strain on the region&#x27;s water resources, which have historically been overexploited and badly managed,&quot; said scientist Olivia Jensen from the National University of Singapore.</p><p>Microsoft projects water consumption will grow until 2028 before stabilizing at 660 million liters the year after as the company adds more closed-loop systems.</p><p>&quot;We&#x27;re evolving fast, and what we&#x27;re building now will consume zero water on a daily basis,&quot; Walsh said.</p><p>As AI technology develops apace, the company has swathes of land reserved on its Jakarta site for future builds.</p><p>But next-generation systems will likely require more computing power, Ghi warned.</p><p>&quot;If these things get larger and larger and more thirsty, then something has to give,&quot; Ghi said.</p><div><br/></div><div><strong>© Agence France-Presse</strong></div><div><br/></div><div><strong><br/></strong></div><div><strong>RELATED VIDEOS</strong></div><div><br/></div><div><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/U2xCUKMSUX4?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/cYMSCAY4glA?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><br/></div>

<p>The data center expansion will increase demand on power grids that are still heavily coal dependent.</p>

The data center expansion will increase demand on power grids that are still heavily coal dependent.

Where AI lives: Southeast Asia's data center boom

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Where AI lives: Southeast Asia's data center boom

Marchio Gorbiano,

with Katie Forster in Tokyo,

Agence France-Presse

Published Feb 26, 2026 11:51 AM PHT

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Karawang

Indonesia technology business environment ai

Agence France-Presse

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