During a press conference held in Tokyo last Friday, Amazon Web Services (AWS) declared its strategic plan to invest a staggering 2.3 trillion yen ($15.5 billion) over the next five years. This significant financial commitment is aimed at bolstering Amazon Web Services’s cloud empire in Japan, propelling the construction of multiple datacenters in the region.
The investment aligns with the surging demand for data processing capacity within Amazon’s network, primarily driven by the widespread development, training, and deployment of artificial intelligence (AI) models on a large scale.
Tadao Nagasaki, President of Amazon Web Services Japan, emphasized the wide-reaching impact of this investment on Japanese industries, including the public and government sectors. Nagasaki stated, “Our investment in cloud infrastructure generates a ripple across Japanese industries, including the public and government sector,” and highlighted how it would empower Japanese organizations to embrace emerging digital technologies, such as artificial intelligence and machine learning.
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Notably, this isn’t AWS’s first foray into the Japanese market. Between 2012 and 2022, Amazon invested 1.51 trillion yen (approximately $10 billion) to establish two cloud regions in Tokyo and Osaka. However, the recent announcement does not clarify whether the new investment will lead to the expansion of existing datacenters or the establishment of additional cloud regions in the country.
The increased spending over the next five years is speculated to be directed towards advanced technologies, especially costly GPUs and AI accelerators. Amazon Web Services anticipates that the infrastructure build-out will contribute approximately $37.8 billion to Japan’s gross domestic product (GDP), which currently stands at about $4.9 trillion.
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Japan’s digital minister, Takuya Hirai, praised the economic opportunities arising from Amazon’s ambitious expansion plans. He commented, “The development of digital infrastructure in Japan is key to strengthening the country’s industrial competitiveness, and datacenters play an important role in this regard.”
Amazon’s venture in Japan reflects its broader strategy in the Asia Pacific (APAC) region. In the previous year, AWS disclosed a $12.7 billion investment to expand its presence in India. The move also aligns with the broader trend in the industry, as both Google and Microsoft are actively enhancing their datacenter capacities in Japan and across the APAC region.