- 30/10/2025
- Category: Commentaries
Authors: Hosea Immanuel Latumahina
Editor: Achmed Faiz Siregar
Introduction: Road Map White Paper and Sovereign AI Fund
On August 11, 2025, Indonesia completed the preparation of the National Artificial Intelligence (AI) Roadmap White Paper.The National Railway Roadmap White Paper process involved the participation and collaboration of 433 multi-stakeholders, combining interdisciplinary ideas and concepts from government, academia, the private sector, the media, and community representatives. The development of the National Railway Roadmap White Paper aims to encourage increased investment in the digital technology and railway sectors, as well as direct the development and construction of strategic areas of digital technology and railways.
One of the strategies contained in the National KA Road Map White Book is the development of the Sovereign AI Fund. The plan is, Sovereign AI Fund will be directed and functioned to become a domestic innovative financing instrument for the development of strategic sectors of digital technology and national railways. The development of the Sovereign AI Fund also focused on encouraging the realization of the big ambition to become a railway hub in the Southeast Asia region. However, the plan to form Sovereign AI Fund is not discussed in detail and comprehensively, but is only presented as a strategic recommendation without any substantial explanation: without a legal regulatory basis, without a nominal initial funding, without conceptual and operational definitions, and without mapping the targeted strategic sectors. Therefore, the plan to establish a Sovereign AI Fund leaves one critical question: is Indonesia ready to form a Sovereign AI Fund?.
Looking for the Substance of Ideas Sovereign AI Fund in the White Paper
In the National Railway Roadmap White Paper, the idea of Sovereign AI Fund is included as one of the strategic recommendations. However, the National Railway Roadmap White Paper does not include specific explanations, particularly regarding conceptual or operational definitions such as funding amounts, institutional forms, or financing schemes and priority areas.
Lack of concrete explanation regarding Sovereign AI Fund gives the impression that planning Sovereign AI Fund is not based on strategic and measurable considerations. In addition, there is a lack of elaborate and comprehensive discussion regarding Sovereign AI Fund This also raises questions and criticism. Considering that financing instruments are policies closely related to the allocation of state financial resources, and a roadmap should be a spectrum that accommodates a policy, the absence of arguments and justification for the planned development of Sovereign AI Fund in the National Railway Roadmap White Paper has the potential to produce biased, premature, and reactive policy instruments.
Decomposing the “Grey Space” in development Sovereign AI Fund
One of the criticisms of the plan to form Sovereign AI Fund The White Paper on the National Railway Roadmap highlights the continued presence of many “grey areas” in Indonesia’s policy planning and preparedness. The lack of a clear legal framework was the initial problem in the planned development of the National Railway Roadmap Sovereign AI Fund. Until now, there has been no legal regulation governing innovative, data-based financing instruments sovereign funds for the digital technology and railway sectors. Without a binding legal basis (legal-binding), the Sovereign AI Fund lacks strong legal legitimacy for its establishment and is vulnerable to weak governance practices.
Apart from the legal regulatory aspects, the draft planning for the development of Sovereign AI Fund The White Paper also lacks conceptual or operational clarity. There is no concrete and specific planning regarding institutions, funding sources, financing schemes to be adopted, mechanisms and projections for return on investment, mapping of stakeholders, and division of roles and functions among actors. The absence of a well-thought-out plan and business model risks creating a Sovereign AI Fund as a financing instrument that is vulnerable to resilience and sustainability.
The absence of mapping of sectors that are priority for financing by Sovereign AI Fund also became a problem in the development plan. The goal of the Sovereign AI Fund as an innovative financing instrument for the development of digital technology and railways in Indonesia, it certainly requires mapping of strategic and priority sectors. Mapping and determining these sectors makes it easier to identify and allocate financing funds to potential sectors with a direct impact (direct impact) towards the development of digital technology and railways, absorption of labor in the digital technology and railways sector, and increasing the contribution of the digital market to local and national economic growth. The absence of priority sectors has the potential to cause misallocation of funding and pose a negative risk to the state’s financial balance.
Currently, Indonesia also has innovative financing instruments based on sovereign funds, such as the Indonesia Investment Authority (INA) and Danantara itself. In addition, the National Railway Roadmap White Paper also contains plans for initiatives blended finance apart from Sovereign AI Fund. Therefore, the existence of existing innovative financing instruments has the potential to make Sovereign AI Fund as overlapping financing instruments without any concrete differentiation, thus risking increasing policy fragmentation in national financing and investment.
The existence of this “grey space” shows that even though the Sovereign AI Fund, while this is an ambitious initiative, without focused and measurable planning, its development has the potential to be distorted and ineffective. Furthermore, underdeveloped research infrastructure, limited human resource capacity, and a domestic railway industry ecosystem still in its infancy present significant challenges in absorbing funding Sovereign AI Fund towards the optimal development and expansion of the national digital market.
Looking at the Risks That Lurk
Immaturity in development planning Sovereign AI Fund has the potential to present multidimensional risks. From an economic perspective, the development of Sovereign AI Fund without measurable planning and clear and targeted regulations, there is a risk of wasting the APBN, reducing the principles of budget efficiency and effectiveness, and sacrificing other more essential spending budgets and other existing financing instruments (crowding-out). Then from the social side, distributing financing without mapping strategic and priority sectors risks widening the digital divide (digital divide) in terms of accessibility and innovation.
From a political and governance perspective, the development and implementation of the Sovereign AI Fund without clear transparency and accountability mechanisms, there is a risk of misuse of funds due to fraudulent practices, especially fraud and moral hazard, such as corruption, collusion, nepotism, and conflicts of interest. Furthermore, there is also the risk of overlapping policy governance with existing financing instruments, which has the potential to increase policy fragmentation, segregate bureaucratic interests, and weaken the consolidation of investment and funding strategies for the national digital technology and railway markets.
In Between Situation: Potential Sovereign AI Fund and Indonesia’s Readiness
As an innovative financing strategy for the development of the national digital technology and railway market, Sovereign AI Fund plays a strategic and potential role. However, this potential can only be realized if the basic prerequisites for policy design, particularly sovereign fund financing policies, are met: strong legal regulations; a clear business model; targeted priority sectors; and systematic and efficient governance.
Therefore, before going further to the development of the Sovereign AI Fund, the government needs to formulate legal regulations and establish transparent and efficient governance based on accountability, carry out mapping of priority sectors and measurable and evidence-based business models (evidence-based), to the consolidation and integration of existing domestic financing instruments. By implementing this strategy, the plan to establish Sovereign AI Fund It is hoped that this will transform into a solid, credible, and effective financing realization for the development of Indonesia’s digital technology and AI capacity in the regional and even global areas.Without it, Sovereign AI Fund will just be a big ambition stuck in the middle of a gray area.
