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Microsoft Commits $2.9 Billion to Support Japanese AI Sector, Joining AWS, NVIDIA and Others 

Last Updated April 10, 2024 11:14 AM
James Morales
Last Updated April 10, 2024 11:14 AM
  • Microsoft will invest $2.9 billion in Japan’s AI infrastructure over the next two years.
  • The latest announcement comes as AWS is also pouring billions into bulking out its data center operations in the country.
  • Meanwhile, Nvidia, OpenAI and Meta have all demonstrated an interest in the Japanese AI sector.

Despite Japan being home to large technology and manufacturing sectors, American investment in the country plateaued in the 2010s, before falling to its lowest level in over a decade in 2022.

Now, however, as US-based Big Tech firms vie for AI dominance, Japan is attracting renewed attention from the likes of Microsoft, OpenAI and Meta.

Investing in AI Infrastructure 

Reflecting the growing demands of the Japanese AI industry, on Wednesday, April 10, Microsoft announced its intention to invest $2.9 billion over the next two years to build out its cloud computing and AI infrastructure in the country.

The company currently operates 2 Azure data centers in the country – one in West Osaka and one in East Tokyo. The new investment will provide them with the latest GPUs needed for demanding AI workloads.

While Microsoft’s latest commitment represents the firm’s largest-ever investment in Japan, rival cloud provider Amazon Web Services (AWS) is pouring even more money into the country.

By 2027, AWS expects  to have spent nearly $18 billion bulking out its Japanese data center operations. 

It has also launched the Large Language Model (LLM) Development Support Program in the country, which provides organizations with up to $6 million of investment in the form of AWS credits

Supporting Research

Alongside major infrastructure investments that promise to equip Japanese AI developers with better GPU resources, American firms are also looking to cultivate Japan’s AI research scene.

For instance, Microsoft is set to open a new AI research lab in Tokyo, supported by $10 million in grants available to academics at the University of Tokyo and Keio University.

Meanwhile, AWS, Microsoft, Arm and Nvidia are funding a $100 million program  to foster collaboration between American and Japanese universities in the field of AI research.

OpenAI Tokyo Office

Reflecting Microsoft’s pivot toward Japan, the Big Tech firm’s AI underling will open a new office in Tokyo as it expands internationally.

With the new location, OpenAI plans to roll out Japanese language AI services later this year, bringing ChatGPT to a whole new audience.

The development comes as Japanese LLMs are reaching new heights and increasingly sophisticated homegrown models threaten to capture the domestic market before US firms make their move.

OpenAI CEO Sam Altman initially floated the idea after meeting Japanese Prime Minister Fumio Kishida last year, when the 2 men discussed AI risks and opportunities.

However, Altman isn’t the only American business leader Kishida has spent time talking about AI with.

Japanese Prime Minister Meets AI Leaders

On a trip to Washinton this week, Kishida met Microsoft President Brad Smith as part of his efforts to attract American investment in Japan’s AI sector.

Commenting on Microsoft’s latest investment, Kishida welcomed the firm’s “significant contributions to the social implementation of generative AI in Japan.”

In recent months, the Japanese Prime Minister has also hosted Meta CEO Mark Zuckerberg and Nvidia’s Jensen Huang at his residence in Tokyo.

“We had a good, productive conversation about AI and the future of technology,” Zuckerberg told reporters  in February.

Meanwhile, Huang said he had committed to helping Japan secure a supply of Nvidia’s highly sought-after AI chips. 

“Demand is very high, but I promised the prime minister we will do our very, very best to prioritize Japan’s requirements for GPUs,” he stated .

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