Japan is rapidly expanding data center construction to meet surging artificial intelligence demand, with facility sizes scaling up to hundreds of megawatts to match big tech standards.
According to Yomiuri Shimbun and other outlets, KDDI, a major Japanese telecommunications company, began operating its latest data center in January at a former Sharp factory site in Sakai, Osaka Prefecture. The facility, equipped with Nvidia's latest semiconductors, will serve major pharmaceutical companies and economic research institutes for AI analysis and development. It features a power capacity of 48 megawatts, equivalent to electricity consumption of 12,000 households. The Japanese government is also pursuing policies to decentralize data centers, which are currently 85% concentrated in cities like Tokyo and Osaka, by distributing them to regional areas.
Data center scale is also increasing. SoftBank, led by Chairman Masayoshi Son, is building a 150-megawatt facility in Sakai with completion targeted by year-end. The company is also advancing a large-scale data center project in Hokkaido. Local governments including Toyama and Kagoshima prefectures are considering construction of 350 to 400-megawatt mega-scale data centers in partnership with regional businesses. Yomiuri noted that "data centers built in Japan until now were only in the tens of megawatts, but they are gradually scaling up to hundreds of megawatts."
This expansion reflects surging AI demand in Japan. The Ministry of Internal Affairs and Communications projects Japan's AI-related market will reach approximately 4.2 trillion yen (about 39 trillion won) by 2029, roughly tripling from last year.
However, Yomiuri noted that whether actual usage demand will sustain these massive investments remains a key question. KDDI's Sakai data center is currently operating at only 10% capacity. Individual adoption of generative AI in Japan stands at 27%, significantly lower than the United States at 69% and China at 81%. While infrastructure investment has been proactive, whether actual service demand will keep pace remains to be seen. Naoki Nishikado, senior researcher at Mitsubishi Research Institute, said, "Preemptive data center investment is essential for AI development, but the Japanese market is still in its early stages. It may take considerable time before the market expands in earnest."
Securing power capacity is essential for enhancing AI processing capabilities, as greater power availability enables operation of more semiconductors required for AI training and operation.