AI Data Center Rivalry Intensifies

Jan 23, 2026 | News On Japan

OSAKA - A large-scale AI data center has begun operating on the site of a former factory in Sakai, Osaka, raising expectations that artificial intelligence will become even more embedded in everyday life while also highlighting the growing battle for dominance in AI infrastructure and its potential impact on Japan’s economy.

The location was once a plant that produced televisions, long regarded as one of Japan’s flagship industries, but has now been transformed into KDDI’s next-generation data center equipped for advanced AI processing.

Rows of server racks fill the facility, with Atsushi Sakurai, head of KDDI’s Service Platform Planning Office, explaining that the servers installed there are dedicated to AI computation. Sakurai said that in terms of processing power, a single rack can handle computing capacity thousands of times greater than a typical home PC.

At the center are Nvidia’s latest GPUs, high-performance image processing semiconductors widely used for developing AI models and running the systems that generate responses when users submit inquiries. Sakurai said GPU servers play a key role both in building AI foundations and in handling real-time AI processing.

However, he also pointed to challenges involved in operating AI data centers at scale, particularly the heat generated when large numbers of servers are packed into a confined space. The facility must remove massive amounts of heat, and cooling the servers requires substantial electricity.

Heat released during the cooling process can be seen on the rooftop, where some of it is emitted as water vapor. KDDI said the center consumes power equivalent to around 12,000 households when operating at full capacity, but it has still reduced electricity usage by roughly 60% compared with previous approaches, while also relying on renewable energy-based electricity to curb rising power demand.

KDDI plans to use the facility to support drug development and manufacturing operations, as well as to help advance the development of domestically produced AI.

KDDI President Hiromichi Matsuda said AI agents are expected to increasingly become part of corporate labor forces, reinforcing the belief that AI will reshape how businesses operate.

With a former television factory now repurposed into an AI data center, the transition from one leading industry to another is being closely watched as a test of whether Japan’s next growth driver can help lift the broader economy.

Source: TBS

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