Indonesia AI Governance: Framework, Challenges & the Road Ahead

Indonesia is forging ahead with plans to integrate artificial intelligence across its economy, with a projected contribution of USD366 billion to the nation’s GDP by 2030, according to a 2023 Kearney report. However, the country’s legal framework governing AI remains nascent, relying on existing regulations rather than dedicated legislation.

Currently, the operation and leverage of AI in Indonesia are subject to the Electronic Information and Transactions Law, amended by Law No.1 of 2026 on Criminal Adjustment, and Government Regulation No.71 of 2019 on the Provision of Electronic Systems and Transactions. Under this framework, AI can be interpreted as an “electronic agent,” defined as a device within an electronic system designed to perform actions automatically. Legal experts, however, argue this definition is insufficient given AI’s capacity for autonomous operation and complex problem-solving.

Ayik Gunadi, a partner at ABNR Counsellors at Law in Jakarta, notes that the existing definition struggles to capture the adaptive behaviour and nuanced output characteristic of modern AI systems. “AI operates not merely in an ‘automatic’ manner but often autonomously, exhibiting human-like adaptive behaviour and complex problem solving capabilities,” Gunadi explained.

In response to the regulatory gap, the Ministry of Communication and Digital Affairs (MOCD) issued Circular Letter No.9 of 2023 on Artificial Intelligence Ethics (CL9), providing guidelines on ethical values, including inclusivity, security, accessibility, transparency, credibility, and accountability. AI operators are expected to prioritize societal safety, prevent discrimination, and implement robust risk and crisis management protocols.

Sector-specific regulations are as well emerging. The Financial Service Authority (OJK) has published the Indonesian Banking Artificial Intelligence Governance, outlining guiding principles such as reliability, accountability, and human oversight. The OJK has also introduced a Code of Conduct for Responsible and Trustworthy Artificial Intelligence in the Financial Technology Industry, emphasizing fairness, transparency, explainability, and human oversight.

Mahiswara Timur, also a partner at ABNR Counsellors at Law, highlighted the OJK’s efforts to align with international standards. “The OJK’s framework introduces AI guiding principles and a risk management classification system mirroring the EU AI Act,” Timur stated.

Further policy development came with the publication of the National AI Roadmap White Paper in August 2025. The roadmap proposes establishing a National AI Co-ordination Task Force to harmonize sectoral laws and regulations, and outlines an AI lifecycle encompassing conception, data collection, processing, and evaluation, each subject to specific principles to minimize risks. It also details key principles of AI governance, including dignity, justice, accountability, and transparency.

The MOCD has also published AI Ethical Guidelines to strengthen the ethical framework established in CL9, offering a self-assessment questionnaire for businesses to evaluate their AI systems against ethical standards.

Despite these initiatives, significant legal challenges remain. Natasya Amalia, a senior associate at ABNR Counsellors at Law, points to the lack of a unified legal definition of AI and the fragmented regulatory landscape as key concerns. “This fragmented approach could lead to overlapping authorities, inconsistent standards and regulatory gaps,” Amalia said.

Privacy risks associated with the large-scale data collection required for AI development are also a concern, particularly regarding compliance with Indonesia’s Personal Data Protection Law. The issue of liability for AI-related harm remains unclear, as Indonesian law does not currently recognize AI as a separate legal entity.

The government is currently preparing a presidential regulation on AI intended to address overarching policy concerns relating to accountability and security, and to serve as a central reference point for aligning AI-related initiatives across ministries and agencies. However, no definitive timeline for its issuance has been confirmed.