UAE Weighs Up to 1 Trillion Yen for Plan to Build Japan’s Biggest AI Data Center in Akita

Plans are advancing to build one of Japan’s largest artificial intelligence data centers in Akita Prefecture with funding from the United Arab Emirates.

The Nikkei reported on Aug. 6 that U.S. AI startup Bitgrit and S2, an IT company based in Akita City, are pursuing a large AI data center in an industrial park in northern Akita City, with operations targeted for the early 2030s.

The project is projected to cost about 2 trillion yen by the time the facility begins operations. The two companies plan to establish a special-purpose company and raise investment and loans from Mubadala Investment Co., the UAE sovereign wealth fund, and other overseas investment funds.

Mubadala is considering an investment ranging from several hundred billion yen to as much as 1 trillion yen, according to the report. UAE Ambassador to Japan Shihab Alfaheem is set to visit Akita Prefecture in mid-August to meet Governor Kenta Suzuki and Akita Mayor Jun Numaya to discuss the data center project and broader cooperation.

The facility is planned with total power-receiving capacity of as much as 500 megawatts. Once completed, it would be among the largest in Japan. Japanese telecommunications carriers, general contractors and energy companies are also expected to participate in building and operating the facility.

Akita was selected in part because of its abundant renewable energy resources. The prefecture is a major offshore wind power hub in Japan, with more than 2 million kilowatts of generating capacity expected to be installed across four sea areas.

Large AI data centers require enormous amounts of power and cooling infrastructure. In Akita, power generation facilities and the data center can be located close together, helping reduce transmission losses. The area also has abundant water resources for cooling.

Before moving ahead with the larger project, Bitgrit plans to start operating a smaller 1.5-megawatt data center in Akita City by the end of 2027. It plans to install Nvidia’s high-performance AI servers to test power management and next-generation communications technology before expanding to the larger facility.

The UAE is expanding overseas digital investment as part of its strategy to diversify away from oil and strengthen its position in artificial intelligence. With geopolitical risks rising in the Middle East, Japan has drawn attention as an investment destination because it is relatively safe and offers stable power supply conditions.

Man-su Choi, Tokyo correspondent, Korea Economic Daily, bebop@hankyung.com