As part of its Southeast Asian development strategy, NVIDIA Corp (NASDAQ:NVDA) has revealed plans to construct a $200 million artificial intelligence (AI) facility in Indonesia.

What Happened: For this initiative, Nvidia is collaborating with the leading local telecommunications company, Indosat Ooredoo Hutchison. According to Indonesia's Communication and Information Technology Minister, Budi Arie Setiadi, the AI center, which will be situated in Surakarta, Central Java region, is anticipated to improve local telecommunications infrastructure and foster digital talent, as reported by CNBC on Friday.

The second-biggest mobile carrier in Indonesia, Indosat Ooredoo Hutchison, has demonstrated a willingness to integrate Nvidia's most recent chip architecture, Blackwell, into its system.

This action is a part of Nvidia's larger Southeast Asian expansion, which is driven by the region's growing digital economy and rising data consumption. Nvidia and Singtel, a Singaporean telecom company, worked together earlier this year to integrate AI capabilities in data centers located around Southeast Asia.

Why It Matters: The timing of Nvidia's entry into Southeast Asia is crucial. A $3.87 billion investment by SK Hynix in a U.S. chip packaging plant demonstrates the company's global commitment to chip manufacturing.

However, given AI's reliance on chip manufacturing, the recent earthquake in Taiwan has sparked worries about the technology's future. Meanwhile, Malaysia has become a major center for semiconductor production as a result of geopolitical concerns between the United States and China.

The global semiconductor business has also been reshaped by Taiwanese chip makers' expansion into Japan. Nvidia's decision to build an AI center in Indonesia in the midst of these changes demonstrates its resolve to expand its footprint throughout Southeast Asia.