Amazon Web Services Inc. will invest 2.26 trillion yen, or about $15.24 billion, in Japan through 2027 to expand its local data center network.

The cloud giant announced the project today during a news conference in Tokyo. The investment is worth significantly more than the 1.51 trillion yen AWS spent on its Japanese data centers between 2011 and 2022. According to the Amazon.com Inc. unit, the infrastructure expansion will add the equivalent of $38 billion to Japan’s gross domestic project.

Reuters reported that AWS will expand its infrastructure capacity in Tokyo and Osaka, the two cities where its local data centers are based. In 2021, the cloud giant disclosed that those data centers support hundreds of thousands of local customers.

The Amazon unit first moved into the Japanese cloud market in 2011 by opening an AWS region in Tokyo. A region is a cluster of availability zones, which in turn each include one or more data centers. AWS’ Tokyo data center cluster started out with two availability zones, then received a third in 2012 and a fourth six years later.

In 2018, AWS brought a limited amount of cloud infrastructure to Osaka, about 250 miles west of Tokyo. The hardware functioned mainly as a disaster recovery environment where customers could keep their backups. In 2021, AWS upgraded its Osaka facility to a full-fledged cloud region with multiple availability zones.

AWS Japan President Tadao Nagasaki said that the data center expansion plan announced today will “support Japanese customers’ data utilization, generate various economic spillover effects and contribute to Japan’s growth.” It will also put AWS in a better position to address mounting local competition from Microsoft Corp. and Google LLC.

Early last year, the search giant opened a cloud data center in Inzai, a city located about an hour’s drive from Tokyo. Google built the facility as part of a $730 million investment initiative it announced in 2022. The infrastructure inside operates at fairly high temperatures compared with the industry average, which allows the search giant to cool the hardware with outside air during cold weather.

Microsoft has operated Azure data centers in the Tokyo and Osaka metropolitan areas since 2014. Last year, Nikkei Asia reported that the company started upgrading the facilities with new hardware optimized to run artificial intelligence workloads. Microsoft installed the equipment as part of a project that will see it host large language models for the Japanese government.

To keep up with customer demand, AWS is expanding its cloud infrastructure footprint in not only Japan but also several other markets. Today’s announcement of the $15.2 billion investment comes a few weeks after it launched its second cloud region in Canada. Last July, it disclosed plans to spend $26 billion through 2030 to expand its data center network in India. 

 Photo: AWS