Indonesia’s Tech Investment Momentum Build with GenAI and Sovereign Cloud Driven by Security

• Indonesia is prioritizing GenAI (57%) and sovereign cloud (79%) as security and execution challenges shape technology investment outcomes
• Nearly two-thirds of enterprises are investing or plan to invest in Agentic AI
• Technology policy emerges as a key investment factor for 89% of enterprises
• More than half of organizations plan sovereign cloud investment

JAKARTA, 13 April 2026. Investments in transformative technologies are continuing to grow among enterprises, with analytics and artificial intelligence (AI) leading the way across all sectors. Sixty-six percent of enterprise respondents are either currently investing in agentic AI (34%) or planning to invest during the coming year (32%), and several profound shifts are reshaping the way enterprise executives view, acquire and deploy these capabilities, according to the latest EY Reimagining Industry Future Study 2026.

The study also shows that levels of investment in 5G have risen year-on-year, while sovereign cloud is another technology now appearing on the enterprise investment radar. This appetite for transformational technologies is being shaped by a new wave of external forces, with policies and laws governing data ranking ahead of competitor actions as factors influencing investment decisions. Over three-quarters (77%) of survey respondents are reassessing their supplier relationships due to the changing geopolitical environment, with long-term investment roadmaps subject to similar scrutiny.

Indonesia’s GenAI Momentum Grows, but Execution and Security Remain Key Hurdles

Indonesia’s investment in transformative technology is gaining traction, led by GenAI, with 57% of respondents citing it as their top priority for the next 12 months. However, execution remains the key challenge, with skills gaps of 52%, regulatory or security concerns 48%, and poor alignment with other technologies 48% cited as the main barriers.

Eric Listyosuputro, EY-Parthenon Indonesia Strategy and Transactions Partner, states:

“Indonesia companies are moving quickly from intent to execution on GenAI, but realizing value will depend on closing capability gaps and strengthening security to support responsible adoption at scale”

Cybersecurity considerations are also accelerating interest in sovereign cloud, with 79% of respondents citing cybersecurity and data control as the main drivers for shifting toward sovereign cloud solutions. In response, organizations are increasingly incorporating sovereignty requirements into cloud strategies, often through hybrid or multi-cloud approaches that combine global capabilities with localized governance and control.

Eric, adds:

“Sovereign cloud is increasingly becoming a strategic consideration as organizations prioritize data control, resilience, and compliance, particularly in regulated sectors such as financial services, telecommunications, and the public sector.”

Looking ahead, turning AI and cloud investment into measurable outcomes will require stronger alignment across business technology, and risk teams. As enterprise expectations evolve, technology providers in Indonesia will need to differentiate through stronger security capabilities, becoming increasingly important, growing demand for more integrated solutions that bring together cloud, data, AI, and cybersecurity capabilities, clearer articulation of business value through better explanation of use cases and outcomes, and support not only technology deployment but also broader transformation, including operating model alignment and capability building. 

Industrial Policy Environment Drives Enterprise Investment

Eighty-nine percent of survey respondents rank the technology policy environment – including new digital sovereignty imperatives – as a key factor when investing in new technologies, while 81% also cite trade wars and tariff disputes.

Rob Atkinson, EY UK&I Technology, Media & Entertainment and Telecommunications Market Leader, says:

“Several considerations feed into businesses’ technology investment plans and decisions, including new policies and laws governing data – such as evolving cybersecurity requirements and emerging national digital sovereignty. Fundamentally, providers can no longer rely on legacy offerings: they need to adapt their service portfolios and partner eco-systems at speed to stay abreast of fast-changing customer requirements.”

The Shift to Sovereign Cloud

The report also shows that enterprise demand for sovereign cloud is on the rise, fueled by geopolitical upheavals and policymakers’ increased focus on data protection and technology self-reliance. Businesses are responding to these shifts, with 17% of survey respondents saying that they are currently investing in sovereign cloud solutions and over half (53%) plan to invest, with the most important drivers for adoption being cybersecurity and data control (61%), customer confidence and trust (40%) and compliance with national policies and regulation (39%).

Adrian Baschnonga, EY Global Technology, Media & Entertainment and Telecommunications (TMT) Lead Analyst, says:

“The move to sovereign cloud is forcing businesses to reappraise their supplier relationships. Service providers should carefully consider their go-to-market strategies in sovereign cloud, making sure that they meet their customers’ changing business objectives, while also exploring new ways to differentiate their offerings.”

Security and AI Capabilities Are in Focus as Firms Reappraise Vendors

As supplier landscapes widen and businesses contend with a new wave of external pressures informing technology investment decisions, the competencies they value in vendors are shifting. Security now ranks first as a supplier attribute, reflecting the rising importance of customer data protection and regulatory compliance. AI embedded in vendor service delivery ranks second, underlining growing demand for informed and frictionless interactions with technology suppliers. Financial services, automotive and manufacturing sectors rate this capability as the most important factor in vendor selection.

Enterprise respondents tend to rate IT providers and cloud vendors ahead of telcos for expertise in delivering business outcomes. As telco operators look to close this close this gap, they can take encouragement from the fact that many business-to-business (B2B) customers see them as more than just connectivity providers. One-third of respondents (33%) primarily view them as infrastructure guardians, led by healthcare (39%) and government organizations (33%).

Atkinson, says:

“The outlook is positive for telcos that can enhance their role as security specialists – given B2B customers’ growing focus on vendor security credentials, and the emergence of new security related services, such as sovereign cloud and fraud management APIs.”

Telcos Are Well-Placed to Meet Business’ Changing Technology Requirements

When choosing information and communications technology (ICT) providers, enterprises are looking for suppliers that truly grasp their strategic needs. Forty-three percent of survey respondents cite the need for better understanding of their business and technology priorities as the improvement they would most like to see. However, more than half (59%) of respondents say that vendors do not demonstrate how they have used technologies internally to aid their own transformation, while the same proportion (59%) say that vendors do not provide enough case studies of how they have delivered value to other businesses.

Enterprises also demand better customer service and support experiences. Fifty-three percent of respondents are looking for higher quality after sale experiences; 51% want better access to service providers’ additional partners; and 43% want more agile interactions with vendor sales representatives. Delivering improvements is now seen as business critical, with 43% of survey respondents saying that they plan to consolidate vendors in the next 12 months – up from 35% compared with last year.

Baschnonga, says:

“There is a real business demand for vendors that act as strategic collaborators, not just technology providers. Organizations are also keen to reduce complexity and are demanding more agile sales interactions and simpler product options. Service providers that can act as consultative partners, while also delivering smoother customer experiences, will gain positive traction in a crowded market.”

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About the research

The EY Reimagining Industry Futures Study 2026 is based on an online survey of 1,590 enterprises from 25 countries and eight industry sectors. Conducted in November 2025, it was the seventh wave of this annual survey. Only respondents who self-selected as “moderately knowledgeable” and above about their organizations’ emerging technology initiatives feature in the survey results. The questionnaire consisted of multiple-choice questions and agreement statements. These explored areas including enterprises’ behaviors, attitudes and intentions toward emerging technologies, including AI, internet of things (IoT) and 5G-based IoT; their perceptions of ICT suppliers’ capabilities; and their engagement with supplier ecosystems.