Benzinga - by Anusuya Lahiri, Benzinga Editor.
Microsoft Corp (NASDAQ:MSFT) plans to invest $2.9 billion in data centers in Japan by 2025, marking its most significant investment in the country.
The investment announcement coincides with Japanese Prime Minister Fumio Kishida’s visit to Washington, underscoring governments’ global prioritization of AI and domestic computing capabilities worldwide.
This initiative aligns with Tokyo’s goal to enhance computing power for artificial intelligence, Microsoft President Brad Smith outlined in a Nikkei interview.
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Microsoft aims to boost AI computing power within Japan to address concerns over domestic data handling abroad.
The company will upgrade two existing sites in eastern and western Japan with advanced AI semiconductors, positioning itself as the world’s second-largest cloud services provider after Amazon.Com Inc (NASDAQ:AMZN) Amazon Web Services (AWS).
Furthermore, Microsoft intends to launch an AI-related reskilling program to train three million Japanese workers in three years.
Microsoft Research Asia will also establish a new Tokyo-based robotics and AI research and development lab.
Collaboration with the University of Tokyo, Keio University, and Carnegie Mellon University will foster automation technology research, leveraging Japan’s technological strengths.
Microsoft’s commitment extends to enhancing cybersecurity resilience in partnership with the Japanese government, addressing the increasing global cyber threats.
Japan remained the most sought-after destination for technology companies looking to reduce their dependence on China with additional impetus from the AI frenzy.
During Kishida’s visit to the Kumamoto plant, Taiwan Semiconductor Manufacturing Co (NYSE:TSM) CEO C.C. Wei announced the company’s goal to source 60% of its materials locally for its first chip manufacturing facility in Japan by 2030.
The Japanese government has significantly invested in TSMC’s venture, providing ¥476 billion ($3.1 billion) to support the establishment of TSMC’s first factory.
Furthermore, Japan has offered an additional ¥732 billion in subsidies for a second TSMC fabrication plant in the region. TSMC’s Kumamoto facility will begin producing logic chips for camera sensors and automotive applications by the end of this year.
AWS has announced its intention to invest approximately 2.3 trillion yen ($15.5 billion) in Japan from 2023 to 2027. The investment aims to expand its data centers and strengthen its business operations in the country.
Price Action: MSFT shares traded lower by 0.12% at $424.10 on the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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