Indosat seeks US$2 billion loan for chip financing in Indonesia

Indonesia's second-largest mobile carrier Indosat is seeking around US$2 billion in loans to purchase advanced chips for its local operations, with Citigroup arranging the deal and approaching other banks to gauge interest. The financing reflects Asia's growing demand for artificial intelligence and the expansion of bank and private credit funding to cover AI hardware, though it brings new risks for lenders amid US-China rivalry in AI.

Indosat seeks US$2 billion loan for chip financing in Indonesia Citigroup is the arranger of the deal and has approached other banks to gauge their interest, sources say JAKARTA Indonesia’s second-largest mobile carrier Indosat is seeking around US$2 billion in loans to purchase advanced chips for its local operations, according to people familiar with the matter, reflecting Asia’s growing demand for artificial intelligence. Citigroup is the arranger of the loan and has approached other banks to gauge their interest, said the people, who asked not to be identified discussing private matters. Indosat did not respond to requests for comment, while a spokesperson for Citigroup declined to comment. Banks and private credit funds are expanding their AI financing to cover not just the construction of data centres but also the hardware that powers them, such as chips, where lender returns can be higher. Still, such funding can bring new risks for lenders, given rising debate about the sustainability of such investments and geopolitical risks amid US-China rivalry in AI. Among other related financing deals, US-based data centre operator GMI Cloud is seeking an NT$20.45 billion US$633 million multi-tranche loan for a factory project in Taiwan. Meanwhile, Brookfield Asset Management and Tor Investment Management provided a US$255 million loan for Silicon Valley-based AI infrastructure platform PaleBlueDot AI. Indosat derives 84 per cent of its revenue from mobile connectivity, according to Bloomberg Intelligence. Its AI push, however, shows its diversification efforts away from traditional revenue streams. BLOOMBERG Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free. Share with us your feedback on BT's products and services