Japan is preparing to build one of the world's largest data centers as demand for AI computing power explodes. A new project in western Japan could rival OpenAI's Stargate initiative in terms of scale.
In brief
- Japan is planning a massive AI-focused data center in Nanto with a power capacity of 3.1 gigawatts.
- The project aims to compete with major global AI infrastructure efforts such as OpenAI's Stargate.
- Japan is positioning itself as a competitive data center hub in the face of growing global demand for AI.
Japan targets AI demand with major data center project
Japan is planning its largest data center development yet to support growing demand for artificial intelligence and cloud computing. The project will be built in Nanto, a city in Toyama Prefecture near the coast of the Sea of Japan.
Local authorities are collaborating with private developer GigaStream Toyama. Together, they plan a campus with a total power capacity of 3.1 gigawatts. According to documents seen by Reuters, this would make Nanto Japan's third major data center hub. Once completed, the facility would be among the largest data centers in the world. Its scale compares to OpenAI's Stargate project, which targets a capacity of 10 gigawatts and an estimated cost of $500 billion.
Data center capacity in Japan is currently concentrated in Tokyo and Osaka. Approximately 85% of existing facilities are located in these two regions. The government is pushing to diversify locations to reduce congestion and pressure on infrastructure.
However, finding suitable sites outside major metropolitan areas has proven difficult. Nanto offers a strategic alternative. The city is approximately 250 kilometers from both Tokyo and Osaka, close enough to serve major urban centers without adding pressure to them.
Why Nanto stands out as a location
One of Nanto's main strengths is security. Toyama Prefecture is among the regions with the fewest major earthquakes, according to the Japan Meteorological Agency.
The availability of electricity is another major factor. The first phase of the Nanto campus will support approximately 400 megawatts of capacity. This matches the scale of some of the largest data centers recently announced in Japan.
The site is designed to accommodate large cloud and technology companies, including Amazon, Microsoft and Google. Construction is expected to progress in stages, with commissioning expected by the end of 2028.
GigaStream Toyama prepares global promotion
GigaStream Toyama specializes in preparing infrastructure for data center operators. Its approach mirrors that of American companies such as Lancium and Tract. The company plans to promote the Nanto campus at the Pacific Telecommunications Council conference in Honolulu next month.
Daniel Cox, who heads GigaStream Toyama, has over 25 years of experience in the Japanese real estate investment market. Nanto city and GigaStream Toyama officials declined to comment ahead of an official announcement expected this week, according to Reuters.
Japan's data center market is growing rapidly
Demand for cloud computing and artificial intelligence continues to drive strong growth. IDC Japan forecasts that Japan's data center market will nearly double to more than 5 trillion yen, or about $32 billion, by 2028. The government sees the sector as key in its broader economic strategy. Japan aims to attract 120 trillion yen in foreign direct investment by 2030, up from 53.3 trillion yen in 2024.
Western Japan offers another advantage. Electricity there is generally more abundant and cheaper than in the east. The region is served by several providers, including Hokuriku Electric Power, Kansai Electric Power and Electric Power Development.
As major global technology companies race to secure compute capacity for AI workloads, Japan is positioning itself as a competitive alternative to existing hubs in the United States and Europe, leveraging stable infrastructure and reliable energy supply.
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