<![CDATA[The exponential shift of global foreign direct investment toward digital infrastructure prompts host states to enforce stringent screening mechanisms and data localization policies to safeguard critical national security interests. However, these sovereign assertions inevitably clash with international investment law. Using a comprehensive doctrinal legal method through statutory, conceptual, and comparative approaches, this study examines the tension between digital sovereignty and investment protections. The results indicate that mandatory data localization and post-establishment cybersecurity interventions significantly breach Fair and Equitable Treatment standards and constitute indirect expropriation, exposing host states to massive international investor-state dispute settlement claims. Consequently, this research concludes that developing jurisdictions, particularly Indonesia, must urgently reconstruct their bilateral investment treaties. By systematically integrating specific digital security exceptions, strictly redefining intangible digital assets, implementing proportional risk-based screening, and guaranteeing independent administrative due process, host states can effectively mitigate arbitration risks while securely facilitating global digital economic market integration and data sovereignty.]]>
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