(March 14): Oracle Corp is in discussions with Indonesia’s government to establish a cloud services centre in the country, people familiar with the matter said, as the US technology giant looks to expand its data center footprint in Southeast Asia.

Austin, Texas-based Oracle is looking at the Indonesian island of Batam off the south coast of Singapore for the project, the people said, asking not to be identified because the talks are private.

Nongsa Digital Park in Batam is favoured as a location considering there are several other data centres there, the people said. Batam’s free trade zone status is also appealing, as is its proximity to the wealthy city-state of Singapore and Malaysia, where Oracle already has plans for similar cloud service businesses, they added, noting discussions aren’t final and may be subject to change.

Oracle didn’t respond to a request for comment. Representatives for Indonesia’s Coordinating Ministry for Economic Affairs also didn’t respond to a request for comment.

Nongsa Digital Park on its website touts its wide availability of electric power, tight security and ideal seismic conditions. It also has 13 international submarine fibre optic cables, linking the park to parts of Indonesia, Singapore and the west coast of the US. Real estate private equity firm Gaw Capital Partners is one of its most-recent tenants, launching a data centre there last month.

US tech leaders from Meta Platforms Inc to Google are building data centres across Asia at a rapid clip, putting the infrastructure in place to support an envisioned boom in artificial intelligence services worldwide. Much of that investment has gone to countries with better-established tech ecosystems and networks such as Malaysia and Singapore. Salesforce Inc recently announced a US$1 billion (RM4.4 billion) investment in the city-state.

Oracle already has two cloud computing centres in Singapore, and last year announced a US$6.5 billion plan to build a similar facility in Malaysia.

Bain & Co estimates that the global market for AI-related products could hit US$990 billion by 2027 as the technology’s adoption disrupts the way companies and countries do business.

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