Microsoft earmarks $2.9B in Japanese data centers to boost AI capacity

Microsoft will spend $2.9 billion on data centers in Japan over the next two years, effectively doubling the company's existing financial commitment to expand its AI and cloud infrastructure across the island nation.

The company said this significant enhancement in digital capacity will enable Microsoft to provide more advanced computing resources in Japan, including the latest graphics processing units (GPUs), which are crucial for speeding up AI workloads.

The announcement, made yesterday in Washington amid the first official US visit by Japanese Prime Minister Fumio Kishida, is the tech giant's single largest investment in Japan, the site of its first international office established 46 years ago.

Microsoft's vice chair and president, Brad Smith, met with the Japanese leader shortly before the news came out.

Smith told Nikkei Asia that the adoption of AI and investments in domestic capability have become "a critical national priority for governments around the world."

"The competitiveness of every part of the Japanese economy ... will depend on the adoption of AI," Smith told the Japanese news outlet, adding that AI is essential to "sustain productivity growth, even when a country has a declining population."

The report said that Microsoft would be installing servers with advanced AI chips at its two cloud data centers in Japan, known as Azure Japan East and West, so that they can offer more AI-enabled services.

Nurturing AI skills and opening an AI lab

As part of its announcement, Microsoft also revealed plans to expand its digital upskilling programs in Japan with the goal of providing AI training to 3 million people over the next three years.

The company said it will offer courses and reference architectures for AI developers and technology companies in Japan. It will also support startups with resources through the Microsoft for Startups Founders Hub and help implement AI-centric programs in vocational high schools.

“The impact that AI is poised to create over the coming years has the potential to generate unprecedented societal benefit for the entire world. The steps we are taking today to empower Japanese citizens through AI technologies and programs—whether job training and skilling, improvements to infrastructure capacity, or new research investments—will in the aggregate help accelerate this process of beneficial innovation," Kevin Scott, chief technology officer and executive vice president of AI at Microsoft, said in a statement.

Furthermore, Microsoft – through its research division – plans to open its first lab in Tokyo, which will focus on areas including embodied AI and robotics.

To enhance research collaboration, the company will provide $10 million resource grants over the next five years to both the University of Tokyo and to the Partnership on Artificial Intelligence Research between Keio University and Carnegie Mellon University.

"With the establishment of Microsoft Research Asia’s new lab in Tokyo, we enter an exciting new phase in our more than two decades of partnership with Microsoft," Teruo Fujii, president of The University of Tokyo, said in a statement. "To maximize the benefits of technologies [such as AI] and promote innovation while minimizing risks, it is essential to collaborate with partners who share our objectives."