IBM and Meta have introduced their AI Alliance to Indonesia, marking a significant expansion of their collaborative effort to advance open-source artificial intelligence. The initiative will provide local businesses with access to open-source AI tools and educational resources, aiming to accelerate adoption across the Southeast Asian nation.
Indonesian AI Ambitions Meet Practical Hurdles
Indonesia has identified AI as a critical growth driver, with United Nations estimates suggesting AI investments could add approximately $366 billion to its GDP by 2030. However, a recent IBM study reveals a gap between adoption and results: while 61% of Indonesian firms are using AI agents, only 27% report achieving their targeted return on investment from these systems.
Challenges include restrictive data regulations, a shortage of skilled talent, and widespread uncertainty about the technology's tangible benefits. The AI Alliance's Indonesia chapter will focus on broadening access while addressing concerns around privacy, cybersecurity, bias, and accountability.
Strategic Moves and Regulatory Scrutiny
The expansion coincides with IBM's ongoing strategic push to strengthen its AI portfolio. The company's proposed $11 billion acquisition of data-streaming specialist Confluent remains under assessment by Australia's competition regulator, the ACCC. Public submissions are due by February 12, with a determination expected by March 19. Regulatory delays or conditions could impact IBM's aim to close the deal by mid-2026.
Catherine Lian, IBM ASEAN's general manager, described Indonesia as "one of the most dynamic digital economies in Southeast Asia," emphasizing IBM's commitment to fostering local innovation. Meta's Berni Moestafa stated the alliance's goal is to make AI "more accessible, safe, and beneficial for all."
The open-source approach is seen as a way to reduce costs and allow customization for local languages and regulations, offering an alternative to reliance on single vendors. However, the strategy also faces complexities, including potential ecosystem fragmentation and the rapid pace of technological change outpacing regulatory frameworks.
IBM shares rose roughly 3.1% in premarket trading Monday, with Confluent's stock also edging higher. The move into Indonesia places IBM and Meta in a competitive landscape that already includes major investments from Microsoft, Alphabet's Google, and Amazon.
