UAE May Invest Up to $6.8 Billion in AI Data Center Project in Akita
Summary
- US AI startup Bitgrit and Akita City-based IT company S2 are pursuing one of Japan’s largest AI data centers with a total project cost of about 2 trillion yen.
- UAE sovereign wealth fund Mubadala Investment Co. is considering an investment of as much as 1 trillion yen, and Japanese telecommunications carriers, general contractors and energy companies are expected to join the project’s construction and operation.
- Akita Prefecture plans a phased expansion built around renewable energy including offshore wind and abundant water resources, starting with a 500-megawatt data center and a 1.5-megawatt smaller facility set to begin operations by the end of 2027.
Forecast Trend Report by Period
Plans are advancing to build one of Japan’s largest artificial intelligence data centers in Akita Prefecture with backing from the United Arab Emirates.
Nikkei reported on August 6 that US AI startup Bitgrit and S2, an IT company based in Akita City, are pursuing a large AI data center in a northern industrial park in Akita City, with operations targeted for the early 2030s.
The total project cost is projected to reach about 2 trillion yen when the facility begins operating. The two companies plan to establish a special-purpose company and seek 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, or about $6.8 billion. UAE Ambassador to Japan Shihab Al Faheem is scheduled to visit Akita Prefecture in mid-August to meet Governor Norihisa Satake and Akita Mayor Jun Numaya to discuss the data center project and broader cooperation.
The facility is planned with power capacity of up to 500 megawatts. Once completed, it would rank among the largest in Japan. Japanese telecommunications carriers, general contractors and energy companies are also expected to participate in construction and operations.
Akita was selected in part for its abundant renewable energy resources. The prefecture is a leading offshore wind hub in Japan, with more than 2 million kilowatts of generating capacity expected across four offshore areas.
Large AI data centers require massive amounts of electricity and cooling infrastructure. Locating power generation facilities near the data center would help reduce transmission losses, and the area also has abundant water resources for cooling.
Before proceeding with the larger facility, Bitgrit plans to begin operating a 1.5-megawatt small data center in Akita City by the end of 2027. It plans to install Nvidia’s high-performance AI servers, test power management and next-generation communications technology, and then expand to the larger site.
The UAE has been increasing overseas digital investment as part of its strategy to diversify beyond oil and build strength in AI. With geopolitical risks rising in the Middle East, Japan is drawing interest as an investment destination because it is relatively safe and offers stable power supply conditions.
Tokyo — Choi Man-su, Korea Economic Daily reporter bebop@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.