Last week, ground was broken on a 640MW AI data-centre campus in West Java. BDx Data Centers began building CGK4 in Jatiluhur on 22 September 2026, according to the company's announcement. Two days later, the government said Nvidia was preparing a multibillion-dollar investment in Batam.

Across Southeast Asia, governments are competing to host the computing power behind artificial intelligence. The case for it rests on investment, growth and skills. The costs show up in electricity, water and concentrated market risk. This article looks at both.

Three signals from September

1. BDx CGK4, West Java. The campus is planned as six buildings. The first will deliver 120MW in phases, with the first phase due to enter service in early 2027. BDx says it has secured 845MVA of grid power from state utility PLN, and its Indonesian expansion is backed by a US$320 million loan facility. BDx Indonesia is a joint venture of BDx, Indosat Ooredoo Hutchison and Lintasarta, according to DCD. The total investment was not disclosed.

"Indonesia is entering a new phase of digital and AI development, and CGK4 is a long-term investment in the infrastructure that phase requires," BDx chief executive Mayank Srivastava said, as reported by DCD.

2. Nvidia and Batam, a government claim. Coordinating Economic Minister Airlangga Hartarto said Nvidia plans to invest about US$4.5 billion (around Rp80 trillion) in the Batam Special Economic Zone, Fortune Indonesia reported on 24 September. As of publication, NDNews has not found a statement from Nvidia confirming the plan, so the figure should be treated as the government's. Nvidia's involvement may come through partners: in June, Firmus Technologies announced a Batam project with Nvidia and DayOne, detikFinance reported.

3. Malaysia's tally. The Malaysian Investment Development Authority (MIDA) said on 14 September that the country recorded RM385.7 billion of data-centre-related investment from 2021 to the first half of 2026. It projects data-centre electricity demand above 5,000MW by 2035, according to its media release.

"The next phase is about what that capacity delivers — AI adoption, home-grown innovation, skilled talent and higher-value jobs," Malaysia's Deputy Minister of Investment, Trade and Industry, Sim Tze Tzin, said in the release.

The benefits

Growth. The Asian Development Bank's September Asian Development Outlook forecasts developing Asia growing 5.0% in 2026 and 5.1% in 2027. It says "strong technology exports driven by an artificial intelligence (AI) boom will support growth prospects" (ADB).

Investment at scale. CBRE estimates that US$11.6 billion went into Asia-Pacific data-centre property in 2025, as reported by the South China Morning Post. Johor in Malaysia, just across from Singapore, has become the region's hotspot. Knight Frank counts 1,110MW live there and an 8,542MW pipeline, with vacancy of just 0.7%, according to The Edge.

A bigger digital economy. The e-Conomy SEA 2025 report by Google, Temasek and Bain puts Southeast Asia's digital economy above US$300 billion in gross merchandise value in 2025. It counts more than US$2.3 billion invested in over 680 AI startups in a year, and projects regional data-centre capacity to grow 180% (Bain).

Local supply chains. Some of the spending reaches domestic firms. MIDA says its business-matching programme this year linked 14 data-centre operators with 51 local vendors, up from 8 and 17 in 2025.

What AI itself is adding

Data centres are the physical layer. The economic case depends on what AI running inside them delivers.

The IMF's 2026 annual report estimates that AI-related technology investment "added an estimated 0.5 percentage point to US GDP growth" in 2025. It cites external estimates that global AI investment "could top $2 trillion" in 2026. Singapore tops the Fund's AI Preparedness Index (IMF).

For workers, the picture is mixed. The International Labour Organization estimates that one in four jobs worldwide is potentially exposed to generative AI, rising to 34% in high-income countries. Clerical jobs are the most exposed. The ILO expects most jobs to be transformed rather than eliminated (ILO).

The costs

Electricity. The International Energy Agency says data centres used about 485 TWh of electricity worldwide in 2025 and projects roughly 950 TWh by 2030 (IEA). In ASEAN, think tank Ember projects Malaysia's data-centre demand rising from 9 TWh in 2024 to 68 TWh in 2030, about 30% of the country's power use. It expects Indonesia's data-centre power-sector emissions to roughly quadruple by 2030 (Ember).

Water. Cooling needs water. In Johor, data centres were allocated only 21% of the water they requested, Malaysia's government said in November 2025, as reported by The Edge. In Batam, BP Batam projections cited by the Earth Journalism Network put planned data centres' needs at about 32 million litres a day by 2032, around 8.4% of the city's current supply.

Market risk. The ADB lists "an abrupt repricing of AI-related equities" among its downside risks (ADB). "The region has remained resilient, but the risks are growing," ADB President Masato Kanda said in the accompanying release.

Indonesia: the numbers don't agree yet

Estimates of Indonesia's current data-centre capacity vary widely depending on who is counting and how:

Source Estimate
Coordinating Economic Minister (Sept 2026) About 800MW now; 1.3GW with the pipeline
IDPRO industry association (Aug 2026) 650MW installed; possibly 1.7GW by end-2026
PLN power-demand projection (Sept 2026) 580MW in 2026; 3.5GW in 2030; about 25GW in 2034

Sources: Fortune Indonesia; Katadata; Republika.

PLN says it serves 159 data-centre customers, with 99% of the capacity on the Java-Madura-Bali grid. Industry group IDPRO says transmission, not generation, is the bottleneck, with some members waiting two to three years for new substations, Katadata reported.

State investment is also involved. Danantara's 2026 plan allocates Rp21 trillion to a data-centre platform with global operators (Antara). In August, Telkom's NeutraDC signed an MoU with PLN, presented as a Danantara-ecosystem initiative, for up to 200MW of additional capacity in Cikarang (Telkom). Demand is strong, according to Danantara's chief technology officer, Sigit Puji Santosa. "If we build 100 megawatts, 200 megawatts, it is immediately sold out," he said in August, as quoted by Antara.

What to watch

  1. Confirmation from Nvidia of the Batam plan, and its scale.
  2. Grid build-out. Transmission and substations will decide how fast announced capacity comes online.
  3. Water and power rules. Johor has already rationed water for data centres. Watch whether Indonesia sets similar conditions.
  4. Local value. Watch how many jobs, vendors and skills programmes the projects actually create. Credible per-project job figures are still scarce.

For how the region's AI chip supply is shifting, see our report on China and Nvidia's RTX Pro 5500.

This article was researched with AI assistance and reviewed by the NDNews editorial team. Figures are as published by the linked sources as of 29 September 2026. It is not investment advice.