Microsoft Delays Data Center Expansion in Indonesia and Other Nations

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TEMPO.CO, Jakarta - Microsoft is reported to postpone or slow down the development project of data centers in several regions, including Indonesia. This delay occurs even though the US-based technology company had previously announced to allocate a fund of US$80 billion (around Rp 1.347 trillion) for data center projects by fiscal year 2025.

The circulating reports stated that Microsoft is postponing or even ceasing negotiations regarding the construction of data centers in Indonesia, the UK, Australia, and several states in the US, such as Illinois, North Dakota, and Wisconsin. In some cases, Microsoft is said to have withdrawn from the negotiation process, while other projects have experienced construction delays.

This move is said to be related to Microsoft's efforts to develop global artificial intelligence (AI) capabilities. However, despite the change in approach, a company representative ensured that the budget plan remains in progress.

"The company still plans to maintain the expenditure budget of US$80 billion for the data centers by fiscal year 2025," said a Microsoft spokesperson, cited from Engadget, Tuesday, April 8, 2025.

The budget had previously been announced in a blog post written by Microsoft's Vice President and President, Brad Smith. In the post, Smith expressed the company's optimism towards the AI policy direction under the then US government.

"This country has a unique opportunity to pursue this vision and build upon the fundamental AI policy ideas established during President Trump's first term in office," he said. "At Microsoft, we are excited to take part in this journey."

Meanwhile, analysts estimated that Microsoft's plan is likely also affected by the new tariff policies imposed by US President Donald Trump. These tariffs are considered to increase the costs of large infrastructure projects and create uncertainty in the financial market. As a result, Microsoft may still spend close to US$80 billion, but may not be able to realize the construction in as many locations as originally planned.

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