January 15, 2025
JAKARTA – Communications and Digital Minister Meutya Hafid has vowed to finish drafting a regulation on artificial intelligence (AI) in the next three months, under an effort led by second deputy communications minister Nezar Patria.
“Within three months, we will create the regulation,” Meutya said on Monday, as quoted by Tempo.co.
She added the government had issued a circular on AI use until the draft regulation was in place, emphasizing that Indonesia was among the first Southeast Asian countries to develop such legislation.
The circular, issued in December 2023 by Budi Arie Setiadi as the head of the previously named Communications and Information Ministry, serves as a temporary guideline on the ethical use of AI.
Read also: Indonesia pursues local, softer approach to AI regulation
Under Meutya’s leadership, the ministry has been working on developing the legal basis for regulating AI since the new cabinet was installed following President Prabowo Subianto’s inauguration on Oct. 20.
Nezar said regulating AI was important to minimize the potential risks of the technology and ensure it was beneficial to the people, particularly in terms of transparency, accountability and humanity.
“The most important thing is that we do not fear this developing technology. We [should] try using AI for the interests of humanity, first and foremost, and [determine] how we can use AI as a product that does not replace or threaten the existence of humanity,” he said on Dec. 16, as quoted by state news agency Antara.
Investor appetite for AI development grew significantly last year, with venture capital investment in the sector expected to top US$45 billion globally, almost double the $24 billion booked in 2023, according to an EY report published on Dec. 20.
Meanwhile, a 2023 Bloomberg Intelligence report projected that the generative AI market would explode to $1.3 trillion over the next decade from just $40 billion in 2022.
Southeast Asia is seen as having a unique opportunity to compete in the global AI landscape, particularly in data centers, according to the e-Conomy SEA 2024 report by Google, Temasek and Bain & Company.
Google estimates that AI could contribute up to $167 billion by 2030 to the Indonesian economy, equivalent to 13 percent of the country’s GDP in 2022. To unlock this potential, Indonesia will need significant investments in infrastructure, foundational technologies, cloud computing and open datasets, it says.
However, the country is at risk of missing out on the global boom in AI development if it does not make a decisive move in filling the gap in relevant infrastructure and human capital compared to its regional peers.
Read also: RI at risk of falling behind in global AI development: Surveys
“AI offers massive economic opportunities, but it also brings risks like high energy demand, costly investments, environmental concerns and job disruption,” Arif Perdana, associate professor in digital strategy, data science and information systems management at Monash University, Indonesia, told The Jakarta Post on Dec. 17.
The country faced a dilemma with regard to AI, he said, as falling behind in the sector could hurt its competitiveness, but jumping in too fast could lead to chaos.
Indonesia ranks the third lowest among the 12 Asia-Pacific countries surveyed in the 2023 Asia Pacific AI Readiness Index of United States software company Salesforce.
This puts Southeast Asia’s largest economy behind its neighbors Singapore and Malaysia, especially in data centers and regulatory frameworks, such as a national AI strategy.