Energy crisis does not hinder the expansion ambition: Microsoft Corporation (MSFT.US) increases investment in Japan by $10 billion, joining forces with SoftBank and Sakura to build AI cloud infrastructure.

Microsoft Corporation (MSFT.US) announced that it will launch a four-year plan in Japan with a total investment of $10 billion. This move is an important part of the American tech giant's expansion of its artificial intelligence (AI) services in Asia, where the demand for AI services is increasing. The world's largest software manufacturer stated that it will collaborate with Japanese companies Sakura Internet and telecommunications operator SoftBank Corp. to build cloud computing and AI infrastructure, with the two Japanese companies providing GPU and other computing resources. Following this news, Sakura Internet's stock price surged by 20% at one point on Friday, marking the largest intraday gain since September last year. SoftBank Corp. (the telecommunications subsidiary of investment group SoftBank Group (SFTBY.US)) also saw a slight increase of 0.5% in its stock price. As part of this investment plan, Microsoft Corporation will allocate funds for collaboration in the field of network security and plans to train 1 million AI engineers by 2029. Microsoft Corporation stated in its announcement that all data processing will remain in Japan. At the time of this statement, Microsoft Corporation President Brad Smith was meeting with Japanese Prime Minister Kishida Fumio. Currently, Microsoft Corporation's Copilot product is still lagging behind OpenAI's ChatGPT and Alphabet Inc. Class C's Gemini in competition. This tech giant, headquartered in Redmond, Washington, is competing with Amazon.com, Inc. (AMZN.US) and Alphabet Inc. Class C for dominance in the Japanese market. Japan is investing heavily to develop a strong AI ecosystem in an attempt to catch up with the U.S. and China. Microsoft Corporation's investment plan in Japan follows similar commitments made earlier this week in Singapore and Thailand, and expands on the scale of its investment in Japan announced in 2024, which was around $2.9 billion over two years. However, with the ongoing conflict in the Middle East for nearly two months and global electricity supply continuing to be tight, energy constraints are becoming increasingly evident as major U.S. cloud service providers plan to invest around $650 billion this year alone in building energy-consuming data centers. Resource-poor Japan, which relies on the Middle East for over 90% of its oil imports, has even restarted less efficient coal-fired power plants to meet its existing energy needs. Despite facing energy pressures, the Japanese government has allocated approximately 1.23 trillion yen (about $7.7 billion) in funding for this fiscal year to support advanced chip and AI research and development. Japan aims to increase its global market share for "physical AI" to over 30% by 2040, leveraging its leading advantage in the industrial Siasun Robot & Automation sector. On the business front, Microsoft Corporation is adjusting its strategy by no longer offering its office AI tool Copilot as a free add-on in software suites, but instead selling it independently. At the same time, it is integrating the two Copilot teams for individual users and enterprise customers to create a more seamless and unified AI service experience across all its products.