NTT Data Group Corp. plans to invest at least $9 billion through 2033 to quadruple its Japanese data center capacity to 1 gigawatt, addressing soaring demand for artificial intelligence infrastructure. The expansion includes adding 750 megawatts of capacity, starting with a 100 megawatt facility in Tochigi Prefecture in 2027. However, the expansion faces severe bottlenecks due to Japan's power grid constraints, which can delay electricity connections by up to a decade in key regions.
NTT Data capacity expansion plan
- ▪NTT Data Group Corp. expects its data center spending to increase by approximately 33% to around $3.3 billion in the fiscal year ending March 2027
- ▪NTT Data Group Corp. intends to add approximately 750 megawatts of data center capacity over seven years starting in 2026
- ▪NTT Data Group Corp. plans to add 42 megawatts of capacity in 2026 and begin construction on a 100 megawatt data center in Tochigi Prefecture in 2027
- ▪NTT Data Group Corp. plans to invest at least $9 billion through 2033 to quadruple its domestic computing capacity to 1 gigawatt
AI computing demand in Japan
- ▪Capital spending by major Japanese companies is projected to reach an all-time high in the fiscal year ending March 2027, driven by artificial intelligence-related investments
- ▪NTT Data Group Corp. is fielding interest from companies seeking to secure approximately 100 megawatts of capacity specifically for artificial intelligence inferencing
Power grid capacity constraints
- ▪Securing necessary approvals to meet data center electricity needs in transmission-constrained regions like Inzai, Chiba Prefecture, can take eight to 10 years
- ▪Global cloud providers, including Amazon Web Services and Microsoft Corp., comprise more than 80% of NTT Data Group Corp.'s Japanese data center business revenue
- ▪SoftBank Corp. is considering an investment in Tokyo Electric Power Co. to secure electricity for its own data center expansion plans
Global cloud provider competition
- ▪Amazon Web Services and Microsoft Corp. are actively expanding their own data centers in Japan while simultaneously seeking additional capacity from NTT Data Group Corp.
- ▪Installing one megawatt of data center capacity in Japan is estimated to cost between ¥2 billion and ¥2.5 billion, excluding the cost of artificial intelligence accelerators
- ▪NTT Data Group Corp. competes globally against data center operators including Digital Realty Trust Inc. and Equinix Inc.
Data center construction economics
- ▪NTT Data Group Corp.'s planned expansion of 750 megawatts is estimated to cost at least ¥1.5 trillion, equivalent to approximately $9.6 billion, for construction and equipment
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