UAE fund weighs a US$6.3 billion AI data center investment in Japan

UAE fund weighs a US$6.3 billion AI data center investment in Japan

The United Arab Emirates (UAE) is considering investing as much as ￥1 trillion (US$6.33 billion) to build an artificial intelligence (AI) data center in Japan, a person familiar with the matter said.

Abu Dhabi sovereign wealth fund Mubadala Investment Co would lead the investment into a 500-megawatt project in Akita Prefecture in northern Japan, which might include other foreign and domestic investors, the person said, asking not to be identified because the information is not public.

Once completed, it could become the largest data center in Japan.

A technician works at an Amazon Web Services artificial intelligence data center in New Carlisle, Indiana, on Oct. 2 last year.

The talks with the Gulf state underscore growing global interest in securing critical AI assets in countries viewed as relatively insulated from geopolitical tensions.

A spokesperson for Mubadala declined to comment.

Total investment surrounding the project, including by suppliers and other companies looking to establish operations nearby, could reach as much as ￥2 trillion, the person said.

A consortium of Japanese companies would likely handle construction and related infrastructure, they added.

As US-China tensions escalate and wars in Europe and the Middle East reshape supply chains, Japan is increasingly viewed by global investors as a stable market with relatively low geopolitical risks.

To attract funding in strategic industries, the Japanese government is in the process of designating several regions, including Akita, across the country as priority investment zones for sectors such as AI data centers and semiconductor manufacturing. It has also allocated massive financial support for related ventures.

Tokyo’s policy has rendered some substantial results. Major chip firms including Taiwan Semiconductor Manufacturing Co (台積電), Tower Semiconductor Ltd and Micron Technology Inc have invested billions of dollars in the country.

Meanwhile, the oil-rich UAE has emerged as one the leading global investors in AI and its underlying infrastructure.

State-backed investor MGX, a joint venture between Mubadala and G42, has been a key vehicle through which Abu Dhabi bets on AI.

MGX last month completed its acquisition of Aligned Data Centers, which has an enterprise value of US$40 billion, alongside BlackRock Inc’s Global Infrastructure Platform and the Artificial Intelligence Infrastructure Partnership.