SoftBank-OpenAI Partnership Takes Shape with Acquisition of Sharp Plant in Japan

SoftBank has started implementing its plans of setting up a key AI operation in Japan, TechCrunch has reported. Through a strategic SoftBank OpenAI Japan partnership, the company has paid $676 million to acquire a plant previously owned by electronics firm Sharp in Sakai city, Osaka.

SoftBank Sharp plant acquisition includes land and buildings at the Sakai Plant in Osaka. The company plans to convert the factory into an AI data center.

An Early Step

The purchase of the factory is an important early step for SoftBank. AI data centers serve as critical linchpins in the huge generative AI boom that is currently sweeping through the tech world. Tech companies need huge data center capacity to train AI models and provision subsequent services.

In February this year, the Japanese company announced that the SoftBank OpenAI collaboration was aimed at deploying advanced enterprise AI known as Cristal Intelligence in the Asia country.

A statement released by the tech company showed that the purpose of the partnership was “to develop and market Advanced Enterprise AI called “Cristal intelligence.” Cristal intelligence will securely integrate the systems and data of individual enterprises in a way that is customized specifically for each company.”

SoftBank has also committed to make annual investments towards AI tools, including ChatGPT.

“SoftBank Group Corp. will spend $3 billion annually to deploy OpenAI’s solutions across its group companies, making it the first company in the world to integrate Cristal intelligence at scale, as well as deploying existing tools like ChatGPT Enterprise to employees across the entire group,” the statement added.

Launching AI Agents in Japan

OpenAI plans to bring its AI technology to the Japanese market by developing AI models at the Sakai plant. SoftBank and OpenAI set up a joint venture called SB OpenAI Japan, in which the companies hold equal shares.

The two companies will use the joint venture to train AI models using customer data acquired through marketing, human resources and other activities. SB OpenAI Japan will then develop and market customized AI agents to customers.

“The JV will serve as a springboard for introducing AI agents tailored to the unique needs of Japanese enterprises while setting a model for global adoption,” SoftBank mentioned in its statement back in February.

In the long-run, the two companies plan to commercialize AI agents developed by OpenAI in Japan, which will be the first globally. Development of AI bots that can handle advanced tasks will require SoftBank and OpenAI to learn from data. OpenAI will supply the graphics processing units required to develop and build AI models in Japan. The AI startup will likely procure the GPUs from Nvidia as well as the Stargate Project.

Considering that setting up the Sakai data center could require up to 100,000 GPUs, OpenAI’s Japan expansion could mean that the AI startup makes an investment of up to $6.7 billion.
SoftBank and OpenAI launched their joint venture soon after collaborating with Oracle and other companies to set up AI infrastructure under the Stargate Project in the US earlier this year. The Japanese tech giant has also invested $25 billion in OpenAI.

Largest Data Center

SoftBank’s AI investment at the Sakai data center shows how the two companies are expanding their collaboration scope. Once complete, the new facility will be among the largest data centers in Japan and the third for SoftBank. The Japanese tech giant plans to commence operations at the Sharp factory in 2026.

The company expects that by this time, the factory will have adequate power capacity to run the AI data center. Initially, the power capacity in the facility will be around 150 megawatts. SoftBank plans to increase it to over 240 megawatts over time. SoftBank will create and run its generative AI models from the Sakai facility. The tech giant already has an operational data center in Tokyo and is building another one in Hokkaido.