Microsoft readies US$10 billion AI investment plan in Japan
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Microsoft made the announcement in a release that coincided with its president Brad Smith’s meeting with Japanese Prime Minister Sanae Takaichi.
PHOTO: EPA
TOKYO - Microsoft has announced a four-year, US$10 billion (S$12.9 billion) investment package in Japan, part of the US company’s Asia-wide push to expand in a region hungry for artificial intelligence services.
The world’s largest software maker said it will develop cloud and AI infrastructure alongside Sakura Internet and telecom operator SoftBank, with the two Japanese entities supplying graphics processing units and other computing resources.
Sakura Internet’s stock jumped 20 per cent on the April 3 news, its biggest intraday gain since September. Shares of SoftBank, the telecommunications arm of investment group SoftBank Group, rose 0.5 per cent.
As part of the package, Microsoft, whose Copilot has struggled to keep pace with OpenAI’s ChatGPT and Google’s Gemini, will invest in cybersecurity partnerships and train a million AI engineers through 2029.
The plan will keep data processing within Japan’s borders, Microsoft said in a release that coincided with its president Brad Smith’s meeting with Japanese Prime Minister Sanae Takaichi.
The Redmond, Washington-based company is battling Amazon.com and Alphabet for dominance in Japan, which is spending billions to develop a robust AI ecosystem and catch up to the US and China.
Microsoft’s commitment in Japan follows similar announcements earlier this week in Singapore and Thailand, as well as a pledge in 2024 to spend about US$2.9 billion in Japan over two years.
But US hyperscalers’ planned outlays of about US$650 billion in 2026 alone to build out power-guzzling data centres are coming up against global power constraints, as the war in the Middle East enters its second month.
Resource-poor Japan relies on the Middle East for more than 90 per cent of its oil, and is already turning to less-efficient coal-fired power plants to make sure it can meet existing energy needs.
Still, Japan’s government is earmarking about 1.23 trillion yen (S$9.9 billion) to support cutting-edge chips and AI development in the 2026 fiscal year. It seeks to use the country’s leadership in industrial robotics to win a more than 30 per cent global market share in so-called physical AI by 2040.
Microsoft has shifted more focus to selling Copilot, its AI tool for the workplace, instead of offering it for free as part of a software bundle. It is combining the separate Copilot teams for consumer and corporate clients in a bid to create a smoother AI service across its offerings. BLOOMBERG
