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Microsoft said it will invest 1.6 trillion yen, or about $10 billion, in Japan between 2026 and 2029 to expand artificial intelligence infrastructure and deepen cybersecurity cooperation with the government. The company unveiled the plan during Vice Chair and President Brad Smith's visit to Tokyo. The investment adds to Japan’s broader push to build domestic AI capacity and strengthen economic security through advanced technologies.
Microsoft said the new package will support AI infrastructure, cybersecurity work, and skills training in Japan over the next four years. The company said the plan includes training 1 million engineers and developers by 2030. It also said the project matches Prime Minister Sanae Takaichi’s goal of supporting growth through advanced strategic technologies while protecting national security.
Brad Smith said the company is moving in response to demand in Japan. “We don’t build these things simply on the basis of a hope and a prayer. We build them on the basis of clear demand and demand signals," he said after meeting Takaichi in Tokyo.
The company said the biggest share of the spending will go toward cloud expansion and new data center development. Microsoft added that it wants to keep data processing inside Japan’s borders so companies and public agencies can use Azure services while storing sensitive data locally.
Microsoft said it will work with Japanese companies, including SoftBank and Sakura Internet, to expand Japan-based AI computing capacity. The two firms are expected to provide graphics processing units and other computing resources for the effort. The plan also includes stronger cooperation with Japanese authorities on cyber threat intelligence sharing and crime prevention.
The announcement also lifted investor attention to the local partners. Sakura Internet shares jumped 20% on April 3, 2026, marking their biggest intraday gain since September. Shares of SoftBank, the telecom unit of SoftBank Group, also moved higher after the news.
Microsoft said Japan’s AI adoption has picked up since 2024, with about one in five working-age people using generative AI tools, based on its own data. The company is also increasing its focus on Copilot, its workplace AI product, while combining its consumer and corporate Copilot teams to create a more unified service.
Japan is also increasing public support for chips and AI. The government is earmarking about 1.23 trillion yen for cutting-edge semiconductor and AI development in the 2026 fiscal year. It is also targeting more than 30% of the global market for “physical AI” by 2040 by building on the country’s strength in industrial robotics.
At the same time, Japan faces a projected shortage of more than 3 million AI and robotics workers by 2040, according to government estimates. That gap has made workforce training a central part of the country’s technology plans, and Microsoft’s pledge to train 1 million people fits into that effort.
Still, energy remains a constraint. Large technology companies are expected to spend heavily on power-intensive data centers, while Japan continues to rely on the Middle East for more than 90% of its oil. Smith acknowledged the risk from global energy uncertainty, saying, “It’s an uncertain world,” and added, “We’ll manage through it, but it’s one of the reasons we build such diversity in our supply chain wherever we can.”
Microsoft’s commitment to Japan follows similar announcements in Singapore and Thailand, as the company expands its AI footprint across Asia while competing with Amazon and Alphabet in cloud and AI services.
