Japan can’t wait to become an AI powerhouse: SoftBank leads the race to transform Sharp’s factory into a data center, pledging to spend 10 trillion yen to nurture big dreams

The transformation is expected to give Japan an edge in its quest to become an artificial intelligence powerhouse.

In early June, Japanese telecommunications company KDDI announced that it would cooperate with Sharp. The aim is to turn the struggling LCD screen factory in Sakai into a data center for artificial intelligence.

Four days later, SoftBank, the telecommunications arm of SoftBank Group, also said it had won “exclusive negotiating rights” to buy most of the facilities from Sharp.

SoftBank and KDDI are just two of the companies vying to turn the factory into an AI data center giant — the transformation is expected to help p Japan has an advantage in its efforts to become an artificial intelligence powerhouse. A third Japanese company has also recently been in talks said to convert the Sakai factory into a data center, according to Nikkei Asia.

The Sakai Plant is located on an industrial complex of about 700,000 square meters built on reclaimed land in Osaka Bay. This is Sharp’s main factory specializing in the production of large-size TV screens – an important component supporting the once-leading TV business a Sharp.

However, this Japanese consumer electronics manufacturer said that it will stop producing screens in the near future due to too much competition from the Chinese opponent. The decision thus opened up a scramble to reuse this potential plant.

SoftBank seems to be leading the race when it announced that it is negotiating the purchase of up to 60% of Sakai’s facilities. SoftBank announced that it will turn the factory into a major data center, thereby promoting AI business.

Earlier, the group also announced plans to spend 10 trillion yen ($63 billion) to turn itself into an ‘AI giant’. Junichi Miyakawa, chairman and CEO of SoftBank, said during an earnings call that his company will become a ” leading the market in innovative AI.”

“Our role in Japan is to implement SoftBank Group’s AI strategy. We will continue to be the core business unit of the group,” said a representative of the telecommunications branch.

For its part, KDDI is also in talks with Sharp to build “one of Asia’s largest AI data centers.” The spokesperson said the company is still working to achieve its original goals and that it is important to have technological strength, not scale land.

The race to turn LCD factories into AI data centers shows Japan’s immediate need to affirm its human intelligence capabilitiesOh no. Setting up such data centers from scratch can take years.

Yuji Iwama, director of research at real estate consultancy CBRE, said data centers in Japan are still a “narrow market narrow”. This is especially true in urban areas.

“Data centers consume at least 10 times more electricity per square meter than an office. This makes it very difficult to find an ideal location,” Yuji Iwama said, adding that the AI data center also has athe difficulties associated with cooling systems to handle heat. “There are very few data centers to operate AI GPUs for synthetic AI.”

Semiconductors that are commonly used for AI training are famous for their power consumption and heat consumption. Yugo Tsutsumi, senior analyst at Tokyo’s Tokai Intelligence Laboratory, said there was a “speed benefit” in leveraging solid existing buildings has been in SoftBank’s calculations. Companies such as Google and Microsoft are also rushing to embrace popular AI chips and build computing power.

According to Nikkei Asia, what makes Sakai special lies in its electric utilities and water resources. Both are legacies from Sharp’s LCD ambitions.

The Sakai facility, which opened in 2009, was originally formed by a consortium of 19 companies that manufacture Sharp’s LCD products. This is considered a gem when the group tries to take advantage of vertical integration or self-supply components to cut counterfeit m cost.

A representative of SoftBank said that Sakai’s promise also lies in its geographical location. With many data centers located near Tokyo, it is extremely useful to distribute computing power to prevent the risk of disruption. It is why SoftBank is also planning to build an AI data center in Hokkaido, Japan’s northernmost island.

For Sharp, signing agreements with large corporations such as SoftBank or KDDI can become a solution to all problems. This factory has long faced many incidents.

A company spokesperson told Nikkei Asia: “Our business, including TV, will remain a top priority. even after the company halted production of large LCD screens. In terms of component business, Sharp will pursue alliances or optimize motherboards y”.

However, there is still an unresolved problem of what will happen to the production staff of the LCD factory. SoftBank and Sharp said there have been no specific talks on redeploying personnel from the Sakai plant to the new facility.

SDP employs about 800 people, the majority of whom work in production-related departments. Sharp’s workers’ union said the company has not yet given a concrete outlook for the future of the Sakai plant as things are still in the process negotiating bank.

A union source said: “We are wondering what will happen. What I want is for employees’ concerns to be addressed as soon as possible.”