SoftBank Corp. is set to acquire the former Sharp LCD panel plant in Sakai, Osaka, to establish a significant AI data center in collaboration with OpenAI.

The acquisition deal is expected to be finalized today, with construction commencing in fiscal 2025 and operations slated to begin in 2026.

This new facility will have an initial power capacity of 150 megawatts, making it one of the largest data centers in Japan, with plans to expand to 250 megawatts by fiscal 2028.

The conversion of the plant represents a strategic shift from traditional electronics manufacturing to a focus on data and AI development.

SoftBank's spokesperson noted that the site will support the commercialization of OpenAI's models in Japan, particularly through their joint venture, SB OpenAI Japan.

OpenAI will provide foundational AI models and essential GPUs for development, while the joint venture will customize AI agents for client companies.

The project emphasizes data sovereignty, ensuring that sensitive corporate data remains within Japan, and will support both the OpenAI joint venture and SoftBank's generative AI model.

This initiative is part of SoftBank's broader strategy to enhance its capabilities in artificial intelligence and data processing.

Reports suggest that the total investment for the project could reach nearly 1 trillion yen, approximately $6.77 billion.

The sale of the Sakai facility is also a critical step for Sharp in its financial recovery, as it aims to offset significant losses in its LCD panel business.

Despite reporting a $2.4 billion loss in its latest quarter, SoftBank remains committed to AI as a core growth strategy and is exploring options to fund its initiatives.

This investment could significantly enhance AI technologies through advanced computing resources, aligning with Japan's government initiatives to bolster its AI and semiconductor sectors.