Artificial intelligence is one of the important parts of Industrial Revolution 4.0 which has huge potential in public service because it can accelerate processes, automate user tasks, and reduce the number of errors. Not only that, but AI could also give $366 billion to Indonesia’s GDP in 2030. In Indonesia, the implementation of AI in public services—known as e-government—is carried out with the application of information technology. Thus, the objective of this article is to explain the implementation of AI in Indonesia, especially in public services. Besides that, the challenges and strategies applied by Indonesia to overcome these challenges were also analyzed. This article used the qualitative research method with a literature review design. In examining the materials related to the topic, the authors more focus on secondary data in the form of journal articles, online articles, or government documents. This article showed a result that there are several challenges in AI development in Indonesia, including an unsupportive environment, lack of awareness and readiness among Indonesian people to use AI technology, inadequate human resources, and poor information and communication technology infrastructures. Besides that, Indonesia is still depending on imported technology and data misuse happened. To cope with these challenges, Indonesia has a plan to use AI technology in several priority issues, such as health, finance, defense, education, tourism, as well as food and biotech. Indonesia has invested heavily in media, telecommunications, and information technology. This is because the government viewed that these three measures could give an impact on society’s perspective and attitude. As consequence, the people can be united and inspired to achieve long-term national growth success. The government then launched the Indonesia AI Strategy (Stranas KA) 2020-2045 which is in line with the agenda of Vision Indonesia 2045. The government believed that this national strategy can provide a blueprint for AI development’s long-term strategy in Indonesia. The use of AI is very important because it can maintain government legitimacy and public trust. By implementing AI in public service, Indonesia has opportunities to monitor its society more easily and strengthen an innovation ecosystem. In this context, AI can be applied in the help desk in the service unit, analysis of service complaints, directing complaints to the intended agency, and even answering complaints. Furthermore, Indonesia has succeeded in integrating the government system as a database in the implementation of e-government. Its implementation also give a positive impact on local government performance, particularly in four aspects, namely costs, budget, time, and human resources. These four aspects become more efficient and effective in terms of assurance, infrastructure, and employment, so the community needs can be responded—and even fulfilled. In conclusion, the Indonesian government needs a regulatory framework that directly supports the requirements and implementation of e-government technology. The capacity and capability of human resources are also critical to be continually improved through motivation and relevant training. In order to increase the awareness and readiness of people to accept advanced technologies, the government should conduct comprehensive socialization within society.