Oracle in talks to establish cloud hub in Batam, Indonesia

Oracle is in talks with the Indonesian Government to set up a cloud services centre on Batam Island, according to people familiar with the discussions.

The move reflects Oracle’s effort to expand its data centre presence in Southeast Asia.

According to Bloomberg, the company is apparently looking into Nongsa Digital Park in Batam as a potential site. The park’s free trade zone status, proximity to Singapore and Malaysia, and existing data centre infrastructure make it an attractive option. Batam also has access to 13 international submarine fibre optic cables, linking it to Indonesia, Singapore, and the United States’ west coast. The discussions are still ongoing and could change depending on various factors, the sources said.

Neither Oracle nor Indonesia’s Coordinating Ministry for Economic Affairs responded to requests for comment.

Strategic location and infrastructure

Nongsa Digital Park has become a hub for data infrastructure due to its strategic location and well-developed connectivity. The park promotes its reliable power supply, high security, and stable seismic conditions as advantages for data centre operations. Real estate private equity firm Gaw Capital Partners recently opened a data centre there, further strengthening the site’s appeal for cloud services.

Batam’s location near Singapore, a major financial and technology hub, adds to its attractiveness. Oracle already operates two cloud computing centres in Singapore and last year announced plans to invest $6.5 billion in a similar facility in Malaysia. Expanding into Batam would give Oracle a presence in a key region for cloud and AI-related services while benefiting from Indonesia’s growing digital economy.

Rising investment in AI and cloud services

Global demand for AI and cloud infrastructure has driven increased investment across Asia. US technology companies, including Meta and Google, have been rapidly building data centres in the region to support the growth of AI services. Salesforce recently announced a $1 billion investment in Singapore to expand its cloud infrastructure.

According to Bain & Co., the market for AI-related products could reach $990 billion by 2027, as AI adoption reshapes industries and business operations around the world. This growing demand is prompting tech companies to establish dependable cloud infrastructure in strategically located markets such as Southeast Asia.

Oracle’s expansion into Batam would position it to capitalise on the region’s increasing need for AI and cloud computing capacity. The proposed centre could help Oracle boost its position in Southeast Asia’s competitive cloud services market, where established companies such as Amazon Web Services and Google Cloud are already active.

Competitive landscape

Southeast Asia has become a focal point for cloud and AI infrastructure. Malaysia and Singapore, with their strong IT sectors, have attracted major investment. Oracle’s entrance into Batam would diversify its footprint and give it a strategic advantage by providing services in a growing market with improving digital infrastructure.

While details of the potential agreement remain uncertain, the move highlights the growing importance of Southeast Asia as a centre for cloud and AI development.

(Photo by Unsplash)

See also: Oracle partners with Meta to power Llama AI models

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