Safeguard
Industry Analysis•

Japan's AI data centres: power limits, Watt-Bit policy, new hubs

Japan wants more AI compute, but Tokyo grid connections can take eight to ten years. How Watt-Bit policy, Hokkaido, Osaka and nuclear restarts fit in.

Safeguard Security Team
17 min read

Japan is building AI data centres under a hard limit: electricity and grid connections, not chips or money. Around Tokyo, new connections can take eight to ten years, so government and industry are steering new capacity toward Osaka, Hokkaido and Kyushu while pairing power and network planning under a policy called Watt-Bit collaboration.

What follows explains how that works in plain terms. It covers national AI policy, where the capacity sits, why the grid is the bottleneck, what nuclear restarts change, and which projects are named in company and government sources. Every figure is labelled with who said it and when. Several come from consultancies or company statements, not from regulators, and a few sources disagree. Where that happens, both views are shown.

Key numbers at a glance

  • Share of Japan's data centre land in Greater Tokyo and Greater Osaka: 88 percent (64 percent Tokyo, 24 percent Osaka), METI data for 2024, as shown in an NTT presentation to the ITU in 2026.
  • Wait for power at new Tokyo area data centres: can exceed 10 years, NTT presentation, 2026. Example given: Inzai City, Chiba, 40 customers waiting for a combined 2.5 GW, as of March 2025.
  • Power delivery time: 8 to 10 years in Tokyo versus 3 to 5 years in Osaka, JLL, 23 September 2025.
  • OCCTO forecast of extra peak demand from data centres and chip plants by fiscal 2035: about 7.6 GW, published 21 January 2026 (as reported by Shulman Advisory).
  • Data centre share of that: about 6.6 GW of peak demand and about 49 TWh a year by fiscal 2035, same OCCTO outlook as reported by Shulman Advisory.
  • Whole country peak demand in fiscal 2026: 159.6 GW across 10 areas, with 803.4 TWh of consumption, same source.
  • Greater Tokyo data centre capacity: 1,086 MW in operation and 2,544 MW upcoming as of the first quarter of 2026, CBRE, reported by Real Estate Asia (published around late September 2026).
  • Hyperscale share of Japan's capacity demand: about 60 to 70 percent, CBRE, same report.
  • SoftBank Tomakomai AI Data Center, Hokkaido: over 300 MW expected, 700,000 square metres, scheduled to start in fiscal 2026, SoftBank statement of 1 May 2025.
  • SoftBank Osaka Sakai AI data centre: 140 MW assumed for planned computing of 110 ExaFLOPS, SoftBank statement of 11 May 2026.
  • Nuclear share of Japan's electricity: 8.5 percent in fiscal 2023 (preliminary), target about 20 percent by 2040, Seventh Strategic Energy Plan as summarised by Nippon.com on 25 February 2026.
  • Planned public support for chips and AI: over 10 trillion yen over seven years, reported by Digitimes on 29 November 2024 as a plan under discussion, not a final budget.

National AI policy: promote first, regulate lightly

Japan passed its AI Promotion Act in the House of Councillors on 28 May 2025, according to Asia News Network. The law sets up a strategic headquarters led by the prime minister and made up of the whole Cabinet. Its job is to write a basic plan for AI research, development and use. The law calls AI a technology that underpins economic and social development and matters for security.

The Act is mainly a promotion law. It gives the government power to investigate AI business operators, give guidance, and publish the names of companies that use generative AI for improper purposes. The same report describes no fines. That fits the general Japanese approach of encouraging adoption first and keeping binding rules narrow.

The first AI Basic Plan followed. A regulation tracking site, regulations.ai, which says it republishes information from the Cabinet Office, lists a first Cabinet decision on 23 December 2025 and a revised plan on 14 July 2026. Treat those two dates as indicative until checked against the Cabinet Office itself, because the tracker is a secondary source. The same page says the plan aims to make Japan "the world's easiest country to develop and utilize AI" and does not impose direct legal duties on private companies.

None of that text says how many GPUs or megawatts Japan wants. The physical build is driven instead by energy and digital infrastructure policy, and by private projects.

Watt-Bit: planning power lines and fibre together

Watt means electricity. Bit means data traffic. Watt-Bit collaboration is the idea that power companies and telecom companies should plan together, because a large AI data centre needs both a very large power feed and fast network links, and the two are built by different industries on different timelines.

The official steps are on record. METI and the Ministry of Internal Affairs and Communications (MIC) launched a public-private advisory council on 18 March 2025, and it met first on 21 March 2025, according to MIC. METI says the council published Report 1.0 on 12 June 2025. The background given by both ministries is that growth in AI use and network traffic is pushing data centre demand up fast, and that data centres need large amounts of electricity. METI ties the effort to the GX 2040 Vision, a Cabinet decision from February 2025 on the shift to a decarbonised economy, and to an earlier Interim Report 3.0 from October 2024.

The idea has a physical meaning too. In an ITU presentation, NTT argues that putting data centres closer to power sources and linking them with high capacity optical networks can cut the cost of moving energy, and it claims cable installation costs could fall to one hundredth in its Watt-Bit model. That is a company claim about its own approach, not a measured national result. The practical point is simple: if power is cheaper and easier to get in Hokkaido, and fibre can carry the data to Tokyo, then compute does not have to sit next to the customer.

Why Greater Tokyo is full

Concentration is the root of the problem. METI data shown by NTT puts 88 percent of Japan's data centre land in the Tokyo and Osaka regions. JLL, citing the communications and land ministries, also says more than 80 percent of capacity is in those two areas.

Around Tokyo the grid has not kept up. NTT says waiting times for power at new data centres near Tokyo can pass 10 years, and gives the Inzai City example of 40 customers waiting for a total of 2.5 GW as of March 2025. JLL, in September 2025, says delivery takes 8 to 10 years in Tokyo and reports that planned power supply in the eastern Chiba area, around Inzai and Shiroi, is already fully allocated through the 2030s. These are consultancy and company statements, and the two sources do not describe the same exact queue, but they point the same way.

CBRE's 2026 data adds the market side. As of the first quarter of 2026, it counts 1,086 MW of data centre capacity in Greater Tokyo and 2,544 MW coming. Much of the new supply in 2025 was effectively pre-leased, several projects have been deferred because of power, and rack prices rose about 3 percent in 2025, mainly because of electricity costs and limited new supply. CBRE says some customers asking about Greater Tokyo want 200 MW to 300 MW, and that some are looking outside the traditional clusters.

It also notes that hyperscale users (very large cloud providers) account for about 60 to 70 percent of capacity demand, driven mostly by global cloud providers running AI inference, while direct demand from local enterprises is limited. It reports that Microsoft has committed US$10 billion between 2026 and 2029 for AI infrastructure in Japan. That is a figure reported by CBRE, so confirm it against Microsoft's own statement before relying on it.

One more constraint shows up in the land market. JLL reports that data centre sites in western Tokyo can cost up to 770 percent more than national land prices, and says the premium tracks whether a site has secured power. In other words, buyers are paying for the electricity connection, not just the plot.

How much more power will Japan need?

The grid operator coordination body, OCCTO, publishes a ten year outlook. Shulman Advisory reports that the edition published on 21 January 2026 covers fiscal 2026 to fiscal 2035 and shows about 7.6 GW of extra peak demand from data centres and semiconductor plants by fiscal 2035, higher than the previous forecast. Data centres account for about 6.6 GW of that and about 49 TWh of yearly energy use. For scale, the same outlook puts national peak demand at 159.6 GW and consumption at 803.4 TWh for fiscal 2026.

Two details matter. First, the data centre forecast stays below the previous outlook until about fiscal 2033, then goes above it from fiscal 2034, which means growth is arriving later than people expected but is still expected. Second, the semiconductor share is not stated separately in the summary; subtracting gives roughly 1 GW, but that is arithmetic, not an official figure.

Longer range numbers vary much more. A 2024 Japan Atomic Industrial Forum report on an OCCTO expert panel says CRIEPI, a power industry research institute, saw data centre demand in fiscal 2050 anywhere from 43 TWh to 211 TWh. For comparison, it notes that three leading communications companies' data centres used 8.6 TWh in 2022, slightly under 1 percent of national demand. A range that wide shows how little anyone can say about 2050.

There is also a sceptical view. An expert commentary on Nippon.com argues that OCCTO demand forecasts have consistently overestimated consumption since 2016 and that digitalisation may reduce power use through efficiency. That is one author's opinion, but it is a useful reminder that past forecasts have missed in the other direction.

Where the new capacity is going

Policy and prices are pushing projects away from Tokyo.

Osaka. JLL says Osaka power delivery takes 3 to 5 years against 8 to 10 in Tokyo, and projects capacity growth there of 170 percent, a JLL projection. It cites SoftBank and KDDI buying the former Sharp factory site in Sakai, for approximately 100 billion yen and 10 billion yen respectively, to convert into AI data centres. SoftBank's own statement of 11 May 2026 says the Osaka Sakai site will host an "AX Factory", an AI data centre with a power capacity of 140 MW assumed for computing of 110 ExaFLOPS, still under development. SoftBank says that figure is the power it assumes the planned computing needs. A 23 June 2026 SoftBank item adds that the Sakai base will also assemble AI servers and house a battery plant, and that the data centre will be one of Japan's largest.

Hokkaido. SoftBank held the groundbreaking for its Tomakomai AI Data Center on 15 April 2025. The company says the site covers 700,000 square metres, is expected to exceed 300 MW, and is scheduled to open in fiscal 2026, which runs to March 2027. It says it is designed to run on renewable energy procured within Hokkaido. SoftBank describes the purpose as countering the overconcentration of data centres in Tokyo and Osaka, and a METI deputy director general attended the ceremony. In a SoftBank News interview published on 25 February 2026, the project lead put progress at about 60 to 70 percent complete, counting design, contractor selection and administrative work, and repeated the target of opening in fiscal 2026. SoftBank's June 2026 shareholder meeting item still described Tomakomai as under construction, and as of 19 October 2026 no SoftBank statement announcing that it has opened has been published. JLL also lists a smaller 15 MW government subsidised renewable data centre at Ishikari, Hokkaido, planned for the first quarter of 2026.

Why Hokkaido? JLL and SoftBank both point to a cool climate, renewable energy and land. Cool air lowers cooling needs. Hokkaido is also where Rapidus, the government backed chip maker, is working on advanced chips at Chitose. Digitimes reported in November 2024 that Rapidus planned pilot production there from April 2025, with mass production of 2 nanometre chips targeted for 2027. Those were the plans as reported in November 2024; Rapidus's later progress is outside the scope of this article.

Kyushu. JLL names Fukuoka and the Kitakyushu area as an emerging hub with lower power rates and good submarine cable links, and CBRE also lists Fukuoka and wider Kyushu as an alternative location with lower power and land costs.

Rules and finance. JLL notes that the Financial Services Agency ruled data centre equipment eligible for REITs, which it expects to draw institutional money, and that new data centres face a mandatory energy efficiency standard of PUE 1.3 or lower. PUE, power usage effectiveness, is total facility power divided by the power used by the computers themselves, so a lower number means less wasted energy.

Nuclear: a supply answer that is slow and contested

Japan's Seventh Strategic Energy Plan was approved by the Cabinet in February 2025. Nippon.com, citing the Agency for Natural Resources and Energy, reports these targets for 2040: nuclear at around 20 percent of electricity, up from 8.5 percent in fiscal 2023, renewables at 40 to 50 percent, and thermal power (coal, gas, oil) at 30 to 40 percent, down from 68.6 percent. The plan assumes digital technology and AI will push demand up. It also keeps open longer life for existing reactors and development of next generation reactors.

Restarts are happening, slowly. Nuclear Newswire (ANS) reported that TEPCO restarted Unit 6 at Kashiwazaki-Kariwa on 21 January 2026, with the plant's seven reactors at a combined capacity of nearly 8 GW. An alarm in the control rod equipment led to a shutdown the next day, and commercial operation was delayed from 26 February, according to Jiji Press via Adnkronos. World Nuclear News reported on 16 April 2026 that TEPCO had resumed commercial operation of Unit 6 at 4pm local time after the Nuclear Regulation Authority issued the required certificates. By then the target had already slipped to 18 March, and a damaged electrical conductor found in mid March pushed it back again. World Nuclear News gives the unit's capacity as 1,356 MWe. The Niigata governor and prefectural assembly gave consent in November and December 2025.

There is no direct line from a given reactor to a given data centre. Reactors feed the shared grid, and the Tokyo bottleneck is partly about wires and substations, not only about generation. So nuclear helps national supply over years, not the local queue in Chiba.

What Japan is actually focusing on

Pulling the sources together, five priorities show up.

  • Spread out the load. SoftBank, JLL and the ministries all frame Hokkaido and Kyushu as relief for Tokyo and Osaka.
  • Pair power with fibre. Watt-Bit collaboration tries to make power and network build out happen together.
  • Keep chips and compute at home. Digitimes reported in November 2024 a plan for over 10 trillion yen over seven years for chips and AI, with 6 trillion yen in subsidies and 4 trillion yen in other support, and about 920 billion yen already given to Rapidus from 2021 to 2023. Those were reports of a proposal; final amounts need checking against budget documents.
  • Sovereign AI. SoftBank says it will offer GPU cloud and sovereign cloud services from its AI data centres, and NTT presents its own language model for confidential uses. Sovereign means kept under domestic control.
  • Cleaner power. The energy plan, the PUE standard and the renewable focus in Hokkaido all point that way.

What is firm and what is uncertain

Firm, because an official or the company itself states it: the Watt-Bit council dates and report; the AI Promotion Act's passage; the Seventh Strategic Energy Plan's targets as summarised by an expert; SoftBank's stated plans for Tomakomai and Sakai; the January 2026 restart of Kashiwazaki-Kariwa Unit 6 and its return to commercial operation in April 2026.

Reasonably consistent but from consultancies or a company slide: the 8 to 10 year Tokyo wait, the 88 percent land concentration, the CBRE capacity figures, the 3 to 5 year Osaka timeline.

Uncertain: whether Tomakomai opens on time in fiscal 2026; how much of the CBRE pipeline will be built given deferrals; the right long range demand number (the range from 43 TWh to 211 TWh by 2050 shows the spread); exact AI Basic Plan dates; whether announced subsidies were enacted at the sizes first reported; and whether the OCCTO demand path, which has shifted later before, shifts again. The sources use different baselines, so do not add their numbers together.

What to watch next

  • OCCTO's next annual outlook, due around January 2027, to see whether data centre peak demand keeps moving later.
  • Whether SoftBank confirms Tomakomai operation in fiscal 2026, and what it says about actual power draw.
  • Reports from the Watt-Bit council after Report 1.0, and any change to how the grid assigns connection capacity.
  • The next steps on Kashiwazaki-Kariwa, including Unit 7, which World Nuclear News says TEPCO is prioritising alongside Unit 6, and units 1 and 2 that ANS mentions.
  • Further moves to Osaka, Hokkaido and Kyushu by cloud providers.
  • Any final detail on AI Basic Plan compute targets.

For the wider region, see the Asia Pacific overview. For related reading on how AI labs commit to compute, see Anthropic compute commitments explained and OpenAI compute commitments, Stargate and 26 gigawatts.

For teams running software on this infrastructure, Safeguard offers SBOM and dependency scanning, with a free scan at https://gold.safeguard.sh/scan.

Quick check

Why are new AI data centres moving away from Tokyo?

Because grid connections around Tokyo are slow and scarce. NTT says waits can exceed 10 years and JLL says 8 to 10 years, against 3 to 5 years in Osaka. Hokkaido and Kyushu also offer land, cooler weather or renewable power.

What does Watt-Bit collaboration mean?

It is a METI and MIC effort, launched with a council in March 2025, to plan electricity and telecom infrastructure together so data centres can be connected to both power and fast networks without long delays.

Does a nuclear restart fix the data centre power problem?

Not directly. Restarts such as Kashiwazaki-Kariwa Unit 6 add supply to the shared grid over time, but local connection waits are about transmission and substations, and no source links a specific reactor to a specific data centre.

Sources

Last reviewed: 19 October 2026.

Industry Analysis
Back to all articles

More on #Industry Analysis

View all
Industry Analysis

Why AI inference demand keeps growing: reasoning, agents, usage

13 min read
Industry Analysis

Training vs inference: how AI compute is actually split

13 min read
Industry Analysis

Tokens per second, TTFT and ITL: reading LLM speed numbers

14 min read
Industry Analysis

Is AI getting cheaper? Cost per token trends and caveats

15 min read

Related articles in Industry Analysis

Industry Analysis

How Many AI Agents Are There in 2026? What the Published Numbers Actually Count

There is no census of AI agents. What Microsoft (nearly 40 million agents registered in Agent 365), Salesforce, OpenAI, IDC and Gartner have actually published, what each figure counts, a reproducible count of the official MCP Registry (46,265 servers), and how to count the agents in your own company.

October 19, 2026Read
Industry Analysis

Why AI inference demand keeps growing: reasoning, agents, usage

Why total AI inference demand keeps rising even as each token gets cheaper: more users, longer reasoning, agent loops and bigger prompts, with sources.

October 19, 2026Read
Industry Analysis

Training vs inference: how AI compute is actually split

What published data says about the split between training and inference compute, why the answer differs by company, and why one clean percentage is rare.

October 19, 2026Read

Never miss an update

Weekly insights on software supply chain security, delivered to your inbox.

Self-healing security runs on Safeguard.

Your first fix PR is minutes away.

Book a demoGet started

No sales call required, even your agent can complete the purchase over MCP.