SoftBank has agreed to purchase Sharp's defunct LCD manufacturing plant in Sakai, Osaka for 100 billion yen ($676 million). The Japanese tech giant announced Friday it will transform the facility into a massive AI data center, with operations scheduled to begin in 2026.
Key Points:
- The 45-acre former LCD factory will initially operate at 150 megawatts, eventually scaling to over 250 megawatts
- SoftBank will use the facility to develop AI models with OpenAI, including possibly the first commercialization of OpenAI's agent models in Japan
- The investment demonstrates SoftBank's determination to establish itself as a major AI infrastructure provider in its home market
This purchase represents a significant step in SoftBank's broader AI strategy, marking its third data center in Japan after existing facilities in Tokyo and Hokkaido, with another planned for Kyushu. The Sakai facility's massive power capacity – eventually reaching over 250 megawatts – makes it one of the largest data centers in Japan, designed specifically to support the enormous computing demands of advanced AI models.
The acquisition comes amid deepening ties between SoftBank and OpenAI. While OpenAI declined to comment on this specific purchase, a SoftBank spokesperson referenced the companies' previous announcement about deploying "Cristal Intelligence," an advanced enterprise AI system, in Japan. According to reports from Nikkei, the joint venture between SoftBank and OpenAI plans to train AI models using client data and sell customized AI agents to businesses.
"This AI data center will be used for generative AI development and other AI-related businesses," SoftBank stated in its press release, adding that it will also make the facility available to universities, research institutions, and companies.
Industry analysts note that the purchase aligns with the growing emphasis on data sovereignty in Japan – keeping critical AI infrastructure and data processing within national borders.
For Sharp, the sale represents a potential financial lifeline. The electronics manufacturer has struggled with LCD panel performance, posting total net losses of 410 billion yen over the two years ended March 2024. The extraordinary profit from this sale may help Sharp return to profitability in the current fiscal year.
The full scale of SoftBank's investment in the Sakai facility could eventually approach 1 trillion yen ($6.7 billion), according to Nikkei calculations based on the estimated 100,000 GPUs required for full operation. These GPUs will likely be procured from Nvidia and the Stargate Project, a company recently launched by SoftBank Group to develop AI infrastructure in the U.S.
This acquisition comes as SoftBank is reportedly negotiating an investment of up to $25 billion in OpenAI at a valuation approaching $300 billion, though that fundraise has not yet closed or been officially announced.
The Sakai data center deal is the culmination of talks that began about 10 months ago when SoftBank signed a memorandum of understanding with Sharp to repurpose the LCD plant. Beyond its primary AI functions, SoftBank has also committed to making the facility environmentally sustainable, stating it will promote carbon neutrality as part of the project.