Indonesia's Technology Investment Momentum Rises, Driven by GenAI and Sovereign Cloud
Investment in transformative technologies continues to rise among companies, with analytics and artificial intelligence (AI) serving as the primary drivers across all industrial sectors. A total of 66% of surveyed companies have invested in agentic AI—34% currently and 32% planning to invest within the next year. Several fundamental changes are also shaping how company executives assess, acquire, and implement these capabilities, according to the EY Reimagining Industry Future study 2026.
The study also indicates that investment levels in 5G technology are steadily increasing year on year. Meanwhile, sovereign cloud is beginning to appear on companies’ investment radars. Interest in these transformative technologies is influenced by a new wave of external factors, where policies and regulations related to data rank highest as influences on investment decisions—surpassing competitors’ actions. More than three-quarters (77%) of survey respondents stated they are reviewing their relationships with suppliers amid changes in the geopolitical environment, with long-term investment landscapes also undergoing similar evaluations.
Eric Listyosuputro, EY-Parthenon Indonesia Strategy and Transactions Partner, said, “Companies in Indonesia are moving quickly from the intention stage to execution in implementing GenAI. However, realising value will heavily depend on the ability to close capability gaps and strengthen security aspects to support responsible large-scale adoption.”
Cybersecurity considerations are also increasingly driving interest in sovereign cloud, with 79% of respondents citing cybersecurity and data control as the main drivers for shifting to sovereign cloud solutions. In response, organisations are increasingly incorporating data sovereignty requirements into their cloud strategies, often through hybrid or multi-cloud approaches that combine global capabilities with localised governance and control.
Eric added, “Sovereign cloud is becoming an increasingly strategic consideration as organisations prioritise data control, resilience, and compliance, particularly in highly regulated sectors such as financial services, telecommunications, and the public sector.”
Looking ahead, transforming AI and cloud investments into measurable outcomes will require stronger alignment between business, technology, and risk management teams. As corporate expectations evolve, technology providers in Indonesia need to differentiate through stronger security capabilities, which are becoming ever more critical, and address the growing demand for integrated solutions that combine cloud, data, AI, and cybersecurity. Additionally, clearer articulation of business value through use case explanations and generated impacts is needed, along with support not only for technology implementation but also for broader transformation, including alignment of operating models and capability development.
A total of 89% of survey respondents place the technology policy environment—including new demands related to digital sovereignty—as a key factor in technology investment decisions. Meanwhile, 81% of respondents also cited trade wars and tariff disputes as factors influencing investment decisions.
Shift Towards Sovereign Cloud
The report also shows that demand from companies for sovereign cloud is continuously increasing, driven by geopolitical turbulence as well as growing attention from policymakers to data protection and technological independence. The business world is responding to these changes, with 17% of survey respondents stating they have currently invested in sovereign cloud solutions, while more than half (53%) plan to invest. The main drivers of adoption include cybersecurity and data control (61%), customer trust and confidence (40%), and compliance with national policies and regulations (39%).