Oracle is currently in discussions with the Indonesian Government to establish a cloud services centre on Batam Island, as per sources familiar with the talks. This move aligns with Oracle’s strategy to broaden its data centre presence in Southeast Asia.
Reported by Bloomberg, Oracle is considering Nongsa Digital Park in Batam as a potential location for the centre. The park’s free trade zone designation, close proximity to Singapore and Malaysia, and existing data centre infrastructure make it an appealing choice. Batam is also connected to 13 international submarine fiber optic cables, linking it to Indonesia, Singapore, and the west coast of the United States. The discussions are ongoing and subject to change based on various factors, the sources added.
Both Oracle and Indonesia’s Coordinating Ministry for Economic Affairs have not provided comments on the matter.
Nongsa Digital Park has emerged as a hub for data infrastructure due to its strategic location and robust connectivity. The park highlights its dependable power supply, high security measures, and stable seismic conditions as benefits for data center operations. Recently, real estate private equity firm Gaw Capital Partners inaugurated a data center there, further enhancing the site’s appeal for cloud services.
Due to its proximity to Singapore, a major financial and technological hub, Batam garners additional allure. Oracle already operates two cloud computing centers in Singapore and previously announced intentions to invest $6.5 billion in a similar facility in Malaysia. Expanding into Batam would grant Oracle a foothold in a crucial region for cloud and AI services while leveraging Indonesia’s burgeoning digital economy.
The escalating demand for AI and cloud infrastructure globally has spurred increased investment across Asia. U.S.-based technology giants like Meta and Google have been swiftly constructing data centers in the region to support the expansion of AI services. Salesforce, for instance, recently disclosed a $1 billion investment in Singapore to extend its cloud infrastructure.
As per Bain & Co., the market for AI-related products could hit $990 billion by 2027, with AI adoption reshaping industries and business operations worldwide. This surge in demand is prompting tech firms to establish reliable cloud infrastructure in strategically positioned markets like Southeast Asia.
Oracle’s expansion into Batam would position it to capitalize on the region’s escalating need for AI and cloud computing capacity. The proposed center could help Oracle bolster its position in Southeast Asia’s competitive cloud services market, where established players like Amazon Web Services and Google Cloud are already active.
Southeast Asia has emerged as a pivotal focal point for cloud and AI infrastructure. With their robust IT sectors, Malaysia and Singapore have attracted substantial investments. Oracle’s potential venture into Batam would diversify its footprint and confer a strategic advantage by providing services in a burgeoning market with improving digital infrastructure.
While specifics of the prospective agreement remain uncertain, the move underscores the rising significance of Southeast Asia as a hub for cloud and AI development.
(Photo by Unsplash)
See also: Oracle partners with Meta to power Llama AI models
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