Indosat Ooredoo Hutchison (IOH), Indonesia’s second-largest telecoms company, is joining the AI race in a bid to “empower Indonesia” and build a model that works for Southeast Asia’s largest economy.
Indosat, ranked No. 106 on this year’s inaugural Fortune Southeast Asia 500 list, plans to launch a large language model for the Indonesian market at a company AI event in the fourth quarter of the year, CEO Vikram Sinha tells Fortune. The company first announced it was building an LLM in March.
The telco is building “Sahabat-AI,” its LLM, with Tech Mahindra, the India-based global consulting service. The company previously suggested “Sahabat-AI” would launch by July; Indosat says the delay was due to work on a "major platform" that would make its LLM be "more substantial and tangible."
A local language LLM will allow Indonesia to preserve its local culture and dialects amid a global surge in generative AI, Sinha says. In the short term, he suggests that “Sahabat-AI” could help customers find information about citizen services.
Sinha hopes that “Sahabat-AI” would put Indosat at the forefront of conversations about sovereign AI, or a model tailored for a particular country, culture and government.
Indosat isn't the only company hoping to build sovereign AI. Naver, which operates South Korea's most popular search engine, is investing in Korean LLMs and chatbots, targeting niches unserved by U.S. Big Tech companies.
Indosat’s in-development LLM is just part of the company’s move into AI. In February, Indosat announced that it would bring Nvidia-powered data centers to Indonesia, and also bring the U.S. company’s AI platforms to the region. Lintasarta, an Indosat subsidiary, launched GPU Merdeka, a “GPU-as-a-service” platform powered by Nvidia, in late August.
Indosat is also working with Google as part of its drive to become an “AI native telco,” Sinha says.
“AI is democratizing innovation at a rapid pace,” Sinha says. “We want to be on the forefront, instead of just being a taker.”
There's a broader drive in Southeast Asia to build AI models that better reflect the region's diverse languages and cultures. For example, Singapore backs the Southeast Asian Languages in One Network (Sea-Lion) project, a model that operates in 11 of the region's languages. "The region is not well represented in the digital space," Sea-Lion lead Leslie Teo said at the Fortune Brainstorm AI Singapore conference in July.
But Sinha knows Indosat needs to find a way to make money off of AI. “It’s not a CSR activity,” he says.
Sinha and Indosat are focused on getting more Indonesians connected, and so the company is still investing heavily in its cellular business.
Earlier this year, Sinha predicted that an additional 21 million Indonesians will go online by 2027. Indosat has been investing to expand its network coverage to rural and remote areas. The telco added 900,000 new customers in the first half of the year. Almost 90% of Indosat’s capital expenditure in the first six months of this year has gone to its cellular business, following a similar trend from last year.
Indosat’s revenue grew 13.4% in the first half of the year to reach $1.8 billion.
Getting more people connected means there will be a higher chance of consumers using Indosat’s AI applications in future like its LLM. Earnings before interest, taxes, depreciation, and amortization also grew by 17.8% to $864 million.
Sinha believes Indosat can only help Indonesia if it continues to grow its revenue and user base.
“Indosat is a very iconic brand, but we can only empower Indonesia if we have a strong P&L and balance sheet,” he says.
