AWS Pours $15B Into Japan As AI Race With Microsoft, Google Continues

AWS will invest $15 billion in Japan to expand its cloud and AI capacity as competition with Google and Microsoft in the region heats up.

The three largest cloud companies in the world—AWS, Microsoft and Google—are battling for market share in Japan with their sights on becoming that country's leading cloud and artificial intelligence provider.

AWS said today that it will invest a whopping $15 billion in Japan to boost AWS’ cloud infrastructure, computing services and AI capacity in the region. Over the next three years, the $92 billion Seattle-based cloud giant will pour billions into expanding AWS product and services availability in the Japanese cities of Tokyo and Osaka.

“AWS’ investment expansion will make it possible to use data in Japan without taking it overseas,” said Tadao Nagasaki, president of AWS Japan, at a news conference in Tokyo today. “As there are data centers at home, cloud services can be used with very low latency.”

One of the key reasons AWS is investing $15 billion in the country is to help drive generative AI availability and GenAI customer adoption for Japan-based businesses.

AWS’ flagship GenAI offer Amazon Bedrock became available in the Tokyo region in October. The company also launched a support program that provided some customers with technical AI training. AWS also made a $6 million investment in the form of cloud credits for Japanese-based customers to build and train large language models (LLMs).

Microsoft, Google And AWS Have GenAI Ambitions In Japan

AWS isn’t the only cloud giant eying Japan as a potentially huge GenAI market opportunity.

Last year, Google began operating its first Japanese data center near Tokyo. Additionally, Google has launched a subsea cable project that connects Canada and Japan. Google also has cloud regions in Tokyo and Osaka that provide cloud storage and infrastructure services.

Microsoft has consistently expanded its cloud infrastructure and Azure product availability in Japan over the past several years. In 2023, the software and cloud giant launched new Microsoft data centers in western Japan.

AWS, Google and Microsoft were all chosen as cloud providers for Japan’s Government Cloud platform services, which are used by all of the country’s central and local governments. Last year, Japan’s Prime Minister Fumio Kishida met with the leaders of AI stars OpenAI and Nvidia to discuss AI technology and policy.

“The development of digital infrastructure in Japan is key to strengthening the country’s industrial competitiveness, and data centers play an important role to this end,” Takuya Hirai, chairman of Japan’s digital society inside the Liberal Democratic Party, said today regarding AWS’ new investment. “It promotes the use of important technologies such as AI and improves the capabilities of research and development in Japan.”

Combined, Microsoft, Google and AWS control approximately 66 percent of the worldwide cloud market.

AWS currently owns a 32 percent share of the global cloud infrastructure services market, followed by Microsoft at 23 percent, then Google at 11 percent, according to third quarter 2023 market data from Synergy Research Group.

All three companies have increased their focus on generative AI since early 2023. Google, Microsoft and Amazon have each launched dozens of new GenAI offerings over the past 12 months, while also investing billions in R&D and training to drive AI customer adoption in 2024.

Looking at AWS’ new $15 billion investment in Japan, Amazon has already invested approximately $10 billion in the country since 2011, following the opening of an AWS cloud region in Tokyo. The $10 billion has been spent on building, operating and maintaining AWS data centers throughout the country.

AWS has a large customer base in Japan including financial giant Nomura, regional telco leader KDDI, and beverage company Asahi. “We see Japan as a very important country,” AWS’ Nagasaki said.