Indonesian telecommunications giant Indosat Ooredoo Hutchison is in advanced discussions to secure a US$2 billion loan dedicated to acquiring chips for its artificial intelligence data center expansion, according to people familiar with the matter. The move underscores a broader industry shift as telecom operators in emerging markets pivot from traditional mobile revenue streams toward high-growth AI infrastructure.
Citigroup Inc. is arranging the financing and is currently exploring a syndication of banks to spread the loan across multiple lenders, the sources said. The loan would mark one of the largest debt packages tied specifically to AI hardware procurement in Southeast Asia, reflecting the region's intensifying race to build out compute capacity capable of supporting large-scale machine learning workloads.
Indosat's push into AI infrastructure follows a previously announced plan with U.S. chipmaker Nvidia to develop a US$200 million AI hub in Central Java. That project, unveiled last year, was designed to deliver high-performance computing services to local enterprises and research institutions. The new loan, if finalized, would significantly expand the scale of Indosat's AI ambitions, enabling the company to procure advanced graphics processing units and related equipment at a time when global chip supply remains constrained.
For Indosat, the diversification into AI infrastructure represents a strategic response to the maturation of Indonesia's mobile market, where subscriber growth has slowed and data pricing remains highly competitive. By building out AI compute capacity, the company aims to capture enterprise demand for cloud-based AI services, a segment that analysts project will grow exponentially across Asia over the next decade.
Industry observers note that Indosat's move also highlights a growing trend among regional telecom operators to leverage their balance sheets for AI infrastructure investments, even as global capital markets remain cautious about the high upfront costs associated with data center development. The syndicated loan structure, if successful, could serve as a template for other carriers in the region seeking to fund similar initiatives without overextending their corporate debt profiles.
The deal comes amid a broader surge in AI compute demand across Asia, driven by governments and private enterprises racing to deploy generative AI applications. Indonesia, with its population of over 270 million and rapidly digitizing economy, has emerged as a key battleground for AI infrastructure investment, attracting interest from global cloud providers and chipmakers alike.
Neither Indosat nor Citigroup has publicly commented on the loan discussions, which remain subject to final terms and regulatory approvals. If completed, the financing would position Indosat among the first Southeast Asian telecom operators to secure dedicated debt funding for AI chip procurement at this scale.
Indosat Seeks US$2 Billion Loan to Fund AI Data Center Chip Purchases
By: IDCNOVARegion: Southeast Asia