Indonesia at the Center of ASEAN's Digital Transformation

Southeast Asia is entering a new phase of growth, with the digital economy and artificial intelligence (AI)-based technologies becoming key drivers. With over 500 million internet users, ASEAN is emerging as one of the world's most dynamic digital regions, opening up significant economic growth opportunities in the coming decade.

Projections indicate that ASEAN's digital economy has the potential to add up to USD 1 trillion to regional Gross Domestic Product (GDP) over the next ten years. This transformation is no longer conceptual; the adoption of AI, strengthening digital infrastructure, and technology integration are now beginning to have a tangible impact on productivity, trade, and regional competitiveness.

Amidst this dynamic, Indonesia occupies a strategic position in ASEAN's digital landscape. With a large domestic market, a young, tech-savvy population, and growing demand for digital solutions, Indonesia is at the forefront of innovation-driven economic growth.

The expansion of digital infrastructure, particularly data centers, cloud services, and connectivity, continues to attract long-term investment. The combination of strong economic fundamentals and digital readiness makes Indonesia a key destination for global capital flows in the region.

ASEAN has consistently attracted a growing share of foreign direct investment (FDI), particularly in sectors that support future productivity. Digital infrastructure and AI are seen as crucial long-term assets, not only for economic growth but also for building regional resilience and sustainability.

In this context, cross-border partnerships play a crucial role. Collaboration between regional and global businesses, including Chinese technology companies, is accelerating infrastructure development, developing local capabilities, and strengthening the digital ecosystem in ASEAN. This collaborative approach also opens opportunities for harmonizing digital trade and talent mobility within the region.

ASEAN has also become an attractive region for investment, with foreign direct investment (FDI) flows into ASEAN showing a solid recovery over the past six years.

Jo Miyake, Head of Banking, Asia and the Middle East, Corporate and Institutional Banking, HSBC, stated that there are substantial factors contributing to economic growth in the ASEAN region. The first is the supply chain, which he believes already plays a crucial role in the supply chain.

ASEAN's strategic position in the global supply chain is a key factor in its digital growth. Despite geopolitical tensions, trade between ASEAN and China remains strong, with bilateral flows reaching $1 trillion. Notably, 30% of this trade is in AI-related hardware, cloud computing, and telecommunications. China has been ASEAN's largest trading partner for 16 consecutive years, and its share of manufacturing foreign direct investment (FDI) in key ASEAN economies such as Indonesia, Thailand, and Vietnam has grown from 10% in 2015 to over 25% in 2025.

ASEAN's share of global exports is projected to increase from 7.4% in 2023 to 9.4% in 2025, driven by growing demand for AI-related hardware, software, and services. Indonesia, with its scale and demographics, is well-positioned to capitalize on this trend, making it an attractive destination for AI infrastructure investment.

This is especially encouraging in Indonesia, with Danantara even setting up an AI-related fund by 2027. This is certainly encouraging, given Nvidia and Microsoft's earlier entry, including into Indonesia.

AI infrastructure development in ASEAN is in a high-growth phase, marked by massive data center construction and foundational investment. However, significant gaps remain. This gap is being addressed by various parties, including Chinese and US tech giants, sovereign wealth funds, European developers, and institutional investors.

Indonesia is witnessing a surge in hyperscaler investment. NVIDIA has pledged $200 million to build an AI center in Surakarta, while Microsoft has pledged $1.7 billion to upskill 840,000 Indonesians and expand cloud infrastructure across Java. Chinese tech giants like Tencent and Alibaba Cloud are also making significant investments, with Alibaba aiming to train 800,000 individuals in cloud computing and AI by 2033.

As a leading global bank in the Corporate and Institutional Banking segment, HSBC supports clients in navigating the complexities of cross-border growth in the China-ASEAN corridor. With its international network, expertise, and deep understanding of the characteristics of each market, HSBC serves as a long-term partner for companies looking to invest and thrive in the digital era.

HSBC believes that innovation-driven economic growth requires more than just financing. It requires global connectivity, strategic insight, and a funding structure capable of supporting large-scale, long-term investments, particularly in digital infrastructure and AI.

This commitment is reflected in HSBC Indonesia's participation as a Sponsor in the China Conference: Southeast Asia 2026, held in Jakarta. This conference serves as a strategic platform to bring together cross-sector stakeholders to discuss the future of economic integration, sustainable investment, and digital transformation in the region.

Through an approach that connects ideas, capital, and clients, HSBC aspires to continue being a key partner for business players.