LOGO

At the turn of the year, significant announcements were made by two of the world’s leading companies, Amazon and Google, regarding data centers, which we will introduce here.

Amazon to Invest 2 Trillion Yen in Data Center Business in Japan

In January, Amazon Web Services (AWS), the world’s largest cloud service provider, announced plans to invest approximately 2.3 trillion yen in Japan over the next five years from 2023 to 2027. The investment will be allocated to expanding data centers, which are the core infrastructure for cloud services, and strengthening operational systems. This acceleration in investment is in anticipation of the explosive increase in data processing needs due to the widespread adoption of generative AI.

The Japanese subsidiary of AWS held a press conference in Tokyo on the 19th to explain its investment strategy. The total investment in facilities and operational costs for data centers in Japan, which process and store customer data, was 1.51 trillion yen over the 12 years from 2011 to 2022. Over the next five years, from 2023 to 2027, they plan to invest 2.26 trillion yen.

This massive investment exceeds the investment plan for the growth market of India, which is projected to reach 1.56 trillion rupees (approximately 1.9 trillion yen) by 2030, highlighting a clear focus on the Japanese market.

At the press conference, Tadao Nagasaki, President of AWS Japan, stated, “We aim to support the utilization of data by Japanese customers, generate various economic ripple effects, and contribute to the growth of Japan.”

Google Group Company to Construct Data Center in Cosmo Park Kata Industrial Estate in Wakayama City

The Cosmo Park Kata industrial estate in Wakayama City is a 252-hectare industrial area developed on the site where soil was extracted for the construction of Kansai International Airport.

Although the Wakayama Prefecture Land Development Corporation advanced the development, economic downturns quickly stalled the plans. The prefecture rented some of the land to promote industrial recruitment, but 87 hectares remained unsold, becoming a longstanding issue.

In this context, more than 40% of this land, totaling over 37 hectares, was sold to Ase LLC, a group company of the American IT giant Google, based in Tokyo.

The total sale price of the land is reported to be 5.94 billion yen.

Furthermore, according to Wakayama Prefecture, there are plans to construct a data center to enhance data processing speed and stability, although the details of the project plan have not been disclosed.

The process of contracting for the sale of the land is set to proceed.

Summary

With a sharp increase in cloud demand for generative AI, American Microsoft is also rushing to invest in data centers in Japan. Microsoft activated several data centers in western Japan in February last year. Google has also been operating Japan’s first data center in Inzai City, Chiba Prefecture, since March of last year. Moreover, expansion in regional areas is expected to accelerate, and we will continue to provide updates on these developments.