Sakura Internet Plans Major Capital Spending to Boost AI Infrastructure

Sakura Internet is set to increase its capital expenditure significantly to meet the surging demand for AI in Japan. The company is considering a budget of up to ¥30 billion (about RM498.23 million) this fiscal year. With AI server usage rates soaring, the need for expanded data center capacity is critical.

The impact sits in capacity, compute costs and supply chains: one deployment or bottleneck can change how companies buy chips, cloud contracts and data-centre space. Readers should track whether the announcement turns into available infrastructure, not just a product claim.

Sakura Internet Inc. is preparing to ramp up its capital spending nearly sevenfold to address the growing demand for artificial intelligence (AI) infrastructure in Japan.

The company’s CEO, Kunihiro Tanaka, indicated that the new allocation could reach between ¥20 billion (about RM498.23 million) and ¥30 billion this fiscal year, a significant increase from the previously announced ¥4.4 billion budget.

The urgency for expansion stems from high AI server usage rates, which are currently between 80% and 90%.

Tanaka emphasized that the company must significantly boost its capacity due to a sharp increase in orders.

In addition to the primary budget, Sakura Internet is also considering an extra ¥6.5 billion for further capital expenditures and the procurement of AI accelerators.

Rapid Data Center Expansion

Japan is keen on enhancing its AI capabilities, which is reflected in the accelerated pace of data center development.

However, this growth comes with challenges, including potential risks to the power grid and the rising costs associated with data center construction.

The country is currently facing chronic labor shortages and increasing material costs, which complicate the buildout process.

Market Reaction

Following the announcement of these plans, shares of Sakura Internet surged by as much as 7.5% in early trading in Tokyo, marking the largest intraday gain in about a month.

This positive market response indicates investor confidence in the company’s strategy to capitalize on the booming AI sector.

National Resilience and AI

The Japanese government views control over chips, data centers, and AI models as crucial for national resilience, especially in a technology landscape dominated by U.S. and Chinese firms.

This perspective is driving investments in domestic capabilities, which is beneficial for companies like Sakura Internet.

Future Funding and Support

Sakura Internet has already utilized approximately half of its planned ¥113 billion budget for AI hardware acquisitions through fiscal 2030.

The Japanese government has pledged subsidies that could amount to ¥57.5 billion, covering nearly half of the company’s data center investments.

In March, Sakura Internet also received approval for its cloud services to be used by government entities, making it the only domestic operator to achieve this designation alongside major global players like Amazon and Google.

As the company moves forward with its ambitious plans, the next checkpoint will be the realization of these capital expenditures and the successful expansion of its data center capabilities to meet the increasing demand for AI services.