Danantara CIO: Indonesia can anchor the AI and energy economy—if governance keeps pace

I was only 23 years old working as an investment banking analyst in Singapore when the opening salvos of the 2003 Iraq War unfolded. Our team was tasked with tracking oil prices and macroeconomic indicators, trying to understand whether a distant regional conflict might ripple across Southeast Asia.

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The war felt far away then—an abstraction to analyze—its consequences filtered through spreadsheets and financial models.

Today, that distance has collapsed. Conflict no longer travels slowly through global markets; it arrives instantly, coursing through energy systems, digital infrastructure, and supply chains—and reshaping capital flows and national competitiveness in real time.

From Jakarta, the war with Iran does not look like a distant geopolitical event. It’s a war of economic positioning—one that will shape how countries like Indonesia manage energy, build industries, and position themselves in an increasingly complex global environment shaped by energy insecurity, supply chain disruption—and new demands set forth by artificial intelligence.

Yet it is precisely in navigating this complexity that Indonesia holds a strategic advantage: with its resource endowment, growing industrial base, and pragmatic approach to global partnerships, the country is well positioned not just to withstand these pressures, but to translate them into long-term economic strength.

A new map for global capital

Conflict in key regions has exposed how fragile global supply chains remain, particularly for import-dependent economies. At the same time, AI is accelerating demand for power and water at a scale few anticipated. Data centers, the backbone of the AI economy, are among the most energy-intensive assets in the world.

Overlay continued geopolitical competition, and the implications become clearer. Companies and governments alike are diversifying supply chains, seeking politically stable, resource-rich environments that reduce exposure to single-country risk.

For global investors, the question is not whether diversification will happen, but where it will happen.

Indonesia is now part of that answer. Through Danantara, a sovereign investment platform, Indonesia is building the institutional capacity to meet that demand—deploying capital at scale while strengthening governance standards and investment discipline.

Moving beyond the resource trap

Indonesia has already demonstrated that policy can shift its role in the global economy.

Until recently, the country exported raw nickel while most of the value creation occurred abroad. The 2019 export ban changed that dynamic, catalyzing a sharp increase in domestic mineral processing investment and accelerating industrial development.

But the experience also offers a cautionary lesson.

Today, a significant share of Indonesia’s refining capacity is controlled by foreign firms. While the country captured jobs and economic activity, much of the technology, power pricing, and higher-value processing remains outside its control.

The implication is not to retreat from global partnerships—it is to structure them differently.

As demand for critical minerals grows, Indonesia now has greater leverage to shape investment terms. Future partnerships must prioritize not only capital inflows, but also technology transfer, shared ownership of high-value processing, and transparent governance structures.

Danantara’s role is to help structure these partnerships—bringing in global capital while ensuring that projects meet higher standards of accountability, deliver long-term value, and strengthen Indonesia’s position in strategic industries.

For global investors, this presents a clear opportunity: participation in one of the world’s most important emerging supply chains, under increasingly structured and transparent frameworks.

The AI opportunity—and constraint

If critical minerals are the foundation of the energy transition, AI infrastructure is the next frontier of competition.

Global technology companies are actively seeking locations for data centers that can meet three requirements: reliable power, access to water, and political stability. Increasingly, there is a fourth: clean energy.

Indonesia has the potential to meet these needs at scale. Yet its current energy mix, still heavily reliant on coal, risks limiting that opportunity. For companies with binding clean energy commitments, this is not a marginal concern. It directly influences investment decisions.

The result is a narrowing window. Countries that can deliver clean, dependable power at scale will capture a disproportionate share of AI-related capital expenditure. Those that can’t will be bypassed—regardless of other advantages.

Here again, execution and governance will determine outcomes. Mobilizing capital into renewable energy—at the speed and scale required—demands institutions that can partner credibly with global investors, manage risk, and deliver projects efficiently. This is a core part of