By Alex Smith |
Microsoft has outlined plans to invest $10 billion in Japan between 2026 and 2029, focusing on the expansion of digital infrastructure, cybersecurity partnerships and workforce development.
The investment builds on a $2.9 billion commitment made in April 2024 and aligns with the Japanese government’s strategy for economic growth and security, including increased focus on advanced technologies such as AI.
The programme is structured around three areas: technology infrastructure, cybersecurity and trust, and skills development. It includes the expansion of in-country cloud and AI infrastructure, collaboration with domestic partners, and training initiatives aimed at addressing workforce shortages.
Japan has seen increased adoption of AI technologies in recent years. According to Microsoft, nearly one in five working-age individuals in the country uses generative AI tools, while 94 per cent of companies in the Nikkei 225 are using Microsoft 365 Copilot. At the same time, the Ministry of Economy, Trade and Industry has projected a shortfall of 3.26 million workers in AI and robotics roles by 2040.
“Microsoft is deeply invested in Japan, and today’s announcement will enable us to meet the country’s growing demand for cloud and AI services,” said Brad Smith, vice chair and president of Microsoft. “We are bringing the world’s best technology, building secure and reliable infrastructure on Japan’s terms, and helping equip its workforce to accelerate productivity and innovation across its economy.”
As part of its infrastructure strategy, Microsoft is collaborating with Sakura Internet and SoftBank to expand access to GPU-based AI computing within Japan. The approach is designed to support data residency requirements by enabling domestic providers to deliver services through Microsoft Azure while maintaining data within the country. The company has also expanded Azure Local to support organisations requiring high levels of governance and resilience, including environments with limited or no connectivity to the public cloud. In addition, GitHub Enterprise Cloud now offers data residency in Japan.
“SoftBank is advancing the development of social infrastructure to accelerate the real-world adoption of AI,” said Junichi Miyakawa, president and chief executive officer of SoftBank. “We are pleased that our collaboration with Microsoft will expand the range of AI infrastructure options available in Japan. Through this initiative, customers will be able to leverage SoftBank’s AI computing platform from within the Microsoft Azure environment, enabling them to use AI with confidence even in areas that require a high level of confidentiality and data sovereignty."
“As digital transformation accelerates across society and industry, the importance of computing infrastructure that supports AI adoption continues to grow,” said Kunihiro Tanaka, founder, chief executive officer and president of Sakura Internet. “Through our ongoing discussions with Microsoft, we are exploring the potential to offer customers in Japan flexible AI infrastructure options that take operational requirements into account."
In the area of cybersecurity, Microsoft is strengthening collaboration with Japan’s National Cybersecurity Office through information sharing and joint initiatives aimed at improving the detection and prevention of cyber threats across public and private sectors. The company is also expanding its work with the National Police Agency through its Digital Crime Unit, focusing on disrupting cybercrime and improving coordination in response to evolving threats.
Microsoft will also introduce a $1 million research grant programme to support large-scale AI research and simulation in Japan, alongside a fellowship programme aimed at developing future research leaders. Additional training initiatives are intended to support the integration of AI into scientific research.
“Microsoft has announced new investments in Japan to support the continued growth of the Japanese economy,” said Miki Tsusaka, president of Microsoft Japan. “Industrial growth and scientific progress are central to strengthening its national competitiveness, and these investments are intended to support the ‘strong economy’ outlined by Prime Minister Sanae Takaichi in her policy address.”
Microsoft is also working with Fujitsu, Hitachi, NEC, NTT Data and SoftBank to train one million engineers and developers in Japan by 2030, covering technologies such as Microsoft Azure, GitHub and Microsoft 365 Copilot. In parallel, the company is partnering with the Japanese Electrical Electronic and Information Union to provide AI training to approximately 580,000 workers, building on a pilot programme launched in October 2025.
“Reskilling and capacity building go beyond improving operational efficiency – they foster the personal growth of each individual union member,” said Masashi Jimbo, president of the Japanese Electrical Electronic and Information Union. “Digital literacy, and AI literacy in particular, is not a threat to employment. Rather, it is a powerful means of enhancing the quality of work and a foundation for building sustainable careers in rapidly changing industries.”
Microsoft is also expanding its CyberSmart AI Programme through the Kyushu Semiconductor Human Resource Development Consortium, supporting the development of AI and cybersecurity skills across government, industry and education sectors in one of Japan’s key semiconductor regions.