AI Industry News: Will the AI Rout Slow Japan Data Center Investment? No Market-Driven Changes Found So Far

Two Sheep compiles major developments in the AI industry from company announcements, media reports and other public information. This article asks whether data center investment in Japan will slow after the sharp fall in Tokyo on November 6, as of 22:30 Japan time on November 6, 2026. The US elections and the US market fall are covered in our November 6 article.

Our conclusion first: in the public information we could check, we found no Japanese data center plan that has been delayed, reduced or cancelled because of the market fall. However, the broad sell-off in Tokyo lasted only one day, November 6, so it is too early to judge whether there will be an effect.

Key Points

• Shares: The Nikkei 225 fell 3,643 points (5.96%) to 57,434 on November 6, the third-largest point fall on record. Data center-related shares also dropped sharply
• Causes: Reports cite more than post-election regulation fears, including doubts about returns on AI spending, US interest rates, and forced selling from margin calls
• Japanese plans: As of November 6, we found no plan delayed, reduced or cancelled because of the market fall. It has been only days, however, so this is not conclusive
• Current limits: Plans in Japan are constrained by grid connection, construction labor and local agreement. These will remain even if markets recover
• What to watch: Any effect would likely appear first in plans that have not started and still need funding, in our view. Earnings from November 9 offer the first clues

1. What Happened in Tokyo on November 6

Indexes

• Nikkei 225: Closed at 57,434.77, down 3,643.13 points (5.96%). This is the third-largest point fall on record, though the percentage fall is outside the top 20. The day's low was 56,745.81
• Losing streak: The index fell for a fifth straight session, down 7,224.70 points (11.17%) from the October 29 close. It fell below 60,000 for the first time in about six months
• TOPIX: Closed at 3,707.99, down 5.90%. About 98% of TSE Prime stocks fell, and all 33 sectors declined
• Against the record: The record close was 72,366 on June 25. The November 6 close is about 21% below it

Shares Tied to Data Centers (November 6 Close, Change on the Day)

• Optical fiber and cable: Fujikura down 9.14%, Furukawa Electric down 8.56%, Sumitomo Electric down 4.96%
• Chips and memory: Kioxia Holdings down 8.72%, Tokyo Electron down 5.60%, Advantest down 4.99%
• Telecoms and cloud: SoftBank Group down 10.83%, SAKURA internet down 5.76%, KDDI down 3.62%, NTT down 2.85%
• Construction and building services: Dai-Dan down 7.63%, Kajima down 7.58%, Taisei down 7.56%, Kandenko down 5.89%
• Electrical equipment and air conditioning: Mitsubishi Electric down 5.35%, Hitachi down 4.82%. Daikin rose 1.51%, one of only three Nikkei members to rise

Over the five sessions, Kioxia fell 41.3% and Fujikura 29.4%. These are share price moves, however, and do not show how each company's data center business is doing. Reports also cite other factors: earnings guidance at Kioxia, and an acquisition and the outlook for an investee at SoftBank Group. The Tomakomai and Sakai data center plans covered in this article belong to SoftBank Corp., the telecom unit, which is a separately listed company from SoftBank Group.

There Is More Than One Cause

• October 30: Results from Amazon and Intel fell short of hopes, and AI and chip shares were sold in Tokyo. The fall began before the election
• November 2: Kioxia dropped sharply despite record first-half results, because its October to December guidance fell short of market expectations
• November 4: Worries about AI spending, disappointment over Apple's results, concern about US rate rises and caution before the US vote count all weighed on shares
• November 5: The Nikkei fell 1.79% but TOPIX rose 1.16%. Advantest alone took about 1,097 points off the Nikkei, nearly the whole fall
• November 6: After the sharp US fall the day before, selling spread across the market. Reports cite fears of AI regulation and stalled data center construction after the Democratic win, doubts about returns on AI spending, forced selling from margin calls, and futures selling
• Asia: South Korea's KOSPI fell more than 8% at one point, halting trading for 20 minutes, and closed down 6.02%
• Factors unrelated to AI: The weakest sector was foods, down 10.02%. A 19.31% fall in Japan Tobacco after reports about its Russian assets was one reason

2. A Share Price Fall Is Not the Same as Slower Investment

Share prices move early on fears about the future. Data center investment, by contrast, advances through contracts for land, power, construction and funding, so a fall in share prices does not automatically change a plan.

• Current reports mostly describe fears: Market commentary gives concern about slower data center construction as a reason for the fall. On November 5, however, Traders Web described this as an association rather than confirmed news. MINKABU also quoted a market participant saying shares were falling as if all construction would stop at once
• The view that investment will be affected: Takahide Kiuchi of Nomura Research Institute said the fall is likely to slow investment at related companies. Reuters said his view is that global data center giants rely heavily on outside funding, so lower share prices could hurt their bond and equity fundraising. Reuters also carried the view of an unnamed Liberal Democratic Party figure that companies will grow more cautious
• The view that this is not a rethink of AI itself: Masahiko Loo of State Street Investment Management said the fall looks more like a reassessment of AI policy risk than of the AI cycle
• Government: Prime Minister Takaichi told the Diet on November 6 that share prices are set by the market, so she would not comment, and that she could not tell whether the fall was temporary. In what we checked, we found no specific government response to the fall. Reuters reported experts saying the government could turn to more fiscal spending if the fall continues, and a Liberal Democratic Party official saying the growth strategy and other set policies should proceed as planned

3. Have Japanese Plans Changed?

What We Found

We searched announcements, earnings materials and reports from October 28 to November 6, 2026, in Japanese and English. We found no Japanese data center plan delayed, reduced or cancelled because of the market fall. We also found no company linking the fall in share prices to a Japanese plan.

This does not mean there is no effect. The broad sell-off in Tokyo happened only on November 6, and SoftBank Corp. and the major builders have yet to report. We can see only public information, not private negotiations.

Recent Announcements

• November 6: Hokkaido's solicitation to hand over its grid applications in Ishikari and Tomakomai continues, with applications open until December 4
• November 5: Getworks, Tokyo Gas Engineering Solutions and Nippon Paper announced land use and power supply contracts for a container data center on Nippon Paper's site in Kushiro, Hokkaido. They plan about 6 MW within fiscal 2026 and about 40 MW by September 2027, with up to 150 MW possible. The announcement came before the US market fall
• October 27: STT GDC secured a ¥93 billion green loan for TYO1 and TYO2 in Inzai, Chiba, with 70.8 MW combined
• October 21: SoftBank Corp. kept its stated target of opening its AI data center in Tomakomai, Hokkaido, within fiscal 2026
• October 7: MC Digital Realty began building the 24 MW KIX15 in Ibaraki, Osaka, with operations expected in the fourth quarter of 2028
• September 11: Tohoku Electric said it is considering attracting a data center of about 1 GW to the former Akita thermal power plant site. No operator or schedule has been decided
• September 11: fantasista and a subsidiary disclosed a basic agreement with a fund run by a US investment manager to start talks on financing for a planned AI data center of about 200 MW in Aoba Ward, Sendai. The agreement is not legally binding and does not fix the financing. The first phase is budgeted at about ¥400 billion, and the land has been acquired. Cloud Watch covered the plan on November 4

All of these were made public before the broad sell-off of November 6. Hokkaido's solicitation opened on October 20, and its November 6 update concerned the Q&A. They do not show what companies have decided since.

What Companies Said

• Hitachi (October 28): Asked about data center projects being delayed, reduced or cancelled, it said it has no reports of delay on orders already received and knows of no schedule or collection problems on ongoing projects. This predates the fall and covers Hitachi Energy's global business
• Daikin (November 5): Nikkei reported it said orders for AI data centers in the Americas remain solid, and that if tighter regulation or revised investment plans materially affect results, that could come in 2028 or later
• Mitsubishi Heavy Industries (November 6): Reuters reported that CEO Eisaku Ito said the effect of the US election on gas turbine demand would be limited, and that data centers may see some change but the mid- to long-term trend will not
• KDDI (November 6): It said about 60% of new orders by MW at its overseas data centers are for AI inference
• SAKURA internet (October 28): It said GPU use is nearly full and raised its full-year operating profit forecast to ¥4.1 billion
• Kandenko (October 30): Nikkei reported new construction orders in the first half rose 14% to ¥442.1 billion, with growth in electrical work for data centers, chip plants and other projects
• Fuji Electric (November 4): Its energy segment's first-half sales were reported up 18.2% to ¥196.4 billion on data center and energy storage projects
• NTT (November 4): It left NTT DATA Group's capital spending plan for the year unchanged at ¥804 billion. This figure is not only for data centers

Most of these comments concern overseas demand or predate the fall. They do not guarantee that plans in Japan will stay the same.

Delays That Began Before the Fall

• SoftBank Corp. in Sakai: The March 2025 announcement aimed for operation during 2026. A May 2026 report put it in fiscal 2027
• Plan in Wakamatsu Ward, Kitakyushu: APL Group moved the start of main construction from November to within fiscal 2026. The company cited business reasons, and nearby residents oppose the plan. Whether the opposition is the cause has not been established
• National forecast: In January 2026, Japan's grid coordinator OCCTO said construction postponements and design changes by operators would make data center power demand rise later than in its previous forecast

All of these came before the current fall. Delays reported from now on will not necessarily be caused by markets.

4. What Limits Plans in Japan Today

Grid Connection

• TEPCO Power Grid: Applications accepted by the end of March 2026 total about 17.9 GW of contract power. Its outlook shows supply of 4.48 GW in 2030, with the full amount in 2037 or later. Applications are not current demand
• Hokkaido: Indicative connection dates for the prefecture's applications run from August 2030 in Tomakomai, and from October 2031 to after December 2032 in Ishikari
• Shiroi, Chiba: The first building of NTT DATA's TKY12 (about 200 MW) is planned for 2030 or later, once power is received
• Waiting times: JLL puts the time from application to supply at about 8 to 10 years in Greater Tokyo and about 3 to 5 years in Greater Osaka

Construction Labor and Costs

• Backlog: Material presented by METI on October 30 shows work on hand at the top 50 builders at 19.1 months, up from 13.7 months in December 2019. This figure is not specific to data centers
• Specialist trades: The same material includes customer views that electrical and air-conditioning subcontractors are the biggest bottleneck
• Costs: In Turner & Townsend's survey of 62 markets, Tokyo ranks first at $18.28 per watt and Osaka second at $17.15
• Weak yen: The firm's Japan report says the weak yen is raising the cost of imported materials and equipment. The dollar traded at about ¥157.9 at 17:00 on November 6

Local Agreement

• Inzai, Chiba: Ten residents sued in March to cancel a building confirmation. Briefings in October on a new plan at Makinohara Station reportedly drew about 600 people
• Hino, Tokyo: Site preparation work reportedly began on October 1, and residents have filed an administrative review request
• Akishima, Tokyo: Residents say they will sue the operator, Nippon GLP, within the year
• Tsukuba, Ibaraki: The first building is under construction, and in October the city council passed a resolution asking the operator to hold a briefing
• Tokyo Metropolitan Government: It has published guidelines for data centers that fit their surroundings and started a certification system with subsidies of up to ¥1.5 billion

Opposition arises plan by plan. A Bloomberg Opinion column argues that opposition in Japan is scattered and that power is the more immediate limit.

Policy Points Toward Support

• Growth strategy: A draft for the Japan Growth Strategy Council on November 6 calls for promoting data center support, power infrastructure, regional coexistence and dispersed siting, and for reviewing rules on the use of transmission lines. It is a draft, not a decision
• Construction: The same draft says a policy package will be compiled by year-end so that construction shortages do not hold back investment
• Unused capacity: Since October 1, extra-high-voltage applications are cancelled if construction contributions are not paid within three months of supply approval. This may reduce applications that are unlikely to proceed

5. Funding

Capital Spending Plans at the Big Cloud Companies

• Microsoft: It guided to about $170 billion for the calendar year. CNBC said this compares with $175 billion before. Microsoft cited late third-party capacity and said demand still exceeds supply
• Alphabet: It kept its 2026 range of $195 billion to $205 billion and said spending will rise significantly in 2027
• Amazon: It kept 2026 at about $220 billion. CNBC reported that CEO Andy Jassy expects more in 2027
• Meta: It narrowed 2026 to $135 billion to $145 billion, raising the low end
• Oracle: It left its full-year plan unchanged in its September 10 results

All of these came before the current fall. As of November 6, we found no announcement of a change made since then. Japan has separate commitments: Microsoft's $10 billion for 2026 to 2029 (not all for data centers), AWS's ¥2.26 trillion through 2027, and Oracle's more than $8 billion over 10 years from 2024. We found no information that these have changed.

Who Funds Data Centers in Japan

• Bank groups: AirTrunk borrowed ¥191.6 billion from 12 Japanese and international banks in March. STT GDC's ¥93 billion in October takes the same form
• Property investors: A 40.5 MW site in Osaka reportedly sold for about ¥156 billion, with CapitaLand Ascendas REIT taking 49%. Digital Core REIT issued ¥5 billion of five-year bonds at 3.47% in October for an Osaka stake
• Telecom majors: NTT and others proceed within their own capital spending plans

Signs of Tighter Funding

• ING loan sale: CNBC, citing Bloomberg, said ING is seeking buyers for 12 data center loans worth about $500 million, with bids due November 19. Nothing indicates Japanese assets are included
• Project Jupiter in the US: Nikkei reported in October that the price of an $18 billion loan involving Japan's three megabanks had fallen, leaving unrealized losses
• AirTrunk listing delay: Its roughly $1.5 billion REIT listing in Singapore was reportedly pushed back, possibly to early 2027. It is not clear whether the REIT's assets include Japan
• Bond market: A Forbes analysis says $37 billion of the $80 billion of data center bonds issued in 2026 is below investment grade
• SoftBank Group: Its credit default swaps, a measure of credit risk, reportedly reached about a four-year high

Most of these concern US projects or predate November. We found no announcement or report of Japanese banks reducing domestic data center lending. We also could not confirm the size of that domestic lending.

Views from the Bank of Japan and the FSA

• Bank of Japan: Its October Financial System Report puts data centers at 3% of major banks' overseas lending. It also points to reliance on single tenants and the fast aging of GPUs
• Stress test: In a scenario with AI-related US shares down about 50% and Japanese shares down about 40%, capital ratios stayed above regulatory levels on the whole. This is a scenario, not a forecast
• FSA: It says it will check loan screening and concentration risk. Bloomberg reported in September an official saying this mainly concerns US projects and that it does not intend to discourage lending
• Rates: The BOJ's policy rate is 1.25%. In market data, the 10-year JGB yield fell from about 2.76% on November 5 to about 2.64% on November 6, as investors bought bonds during the sell-off. For that day at least, rates did not rise

6. If There Is an Effect, in What Order?

What follows is our own view based on public information, not established fact.

According to CRIEPI, a data center can be built in as little as one to three years, but grid limits are stretching more projects past five years, and AI sites above 100 MW can take five to 10 years for connection and power. New transmission lines take four years or more, and sometimes seven to 10. A market move is therefore unlikely to show up quickly in construction. We expect decisions made before construction starts to change first.

1. Least likely to move: Projects already under construction, with power and funding secured
2. Next most likely to be reviewed: Announced plans that have not started, and later expansion phases
3. First to be affected: Plans that depend on outside funding, with neither users nor loans settled. Mr. Kiuchi also points to reliance on outside funding, though he was speaking of global data center giants

There are other routes too. Ministry of Land, Infrastructure, Transport and Tourism material describes subcontractors that are not adding staff because they cannot see future work. Wider unease about AI spending could strengthen that caution. On the other side, we found no evidence on whether tighter US rules would move plans to Japan or shrink global budgets.

7. Key Dates Ahead

Dates may change.

• November 9: Results from SoftBank Corp., Furukawa Electric and Shimizu
• November 10: Results from SoftBank Group and Fujikura
• November 11: Results from Taisei and Kajima
• November 13: Results from Obayashi, MUFG, SMFG and Mizuho
• November 17 (US time): Results from NVIDIA
• November 19: Bid deadline for ING's loan sale (reported)
• December: Proposals for Hokkaido's solicitation (December 14 to 21)
• By year-end: Policy package for construction

8. What It Means for Data Centers and Compute

• Share prices reflect unease. To confirm a change in investment, look at specific facts such as power delivery dates, construction starts and loan drawdowns
• Limits on grid connection and construction labor will remain even if markets recover. Delays unrelated to markets may continue
• The first clues will come from earnings from November 9: orders at builders, what SoftBank Corp. says about Sakai and Tomakomai, and how banks describe their lending

We believe the outlook for data center investment in Japan is best judged by building up facts such as power delivery dates, construction starts and loan drawdowns, rather than by share prices. This is our view of the industry in general, not of any plan named in this article.

9. About Two Sheep Co., Ltd.

Two Sheep Co., Ltd., headquartered in the Telecom Center Building in Aomi, Koto-ku, Tokyo, provides on-site work at data centers and the shipping and installation of IT equipment.

• 24/7/365 Remote Hands: at data centers in Tokyo and Osaka (Equinix TY and OS sites, AT TOKYO CC1 and CC2, NTT and others), we handle server rack-mounting, cabling, part replacement (RMA), status checks and more
• International shipping and import/export customs for IT equipment: we arrange transport and customs clearance from overseas all the way into the data center
• Migrations, connectivity and optical modules: we handle data center migrations, arrange IP transit and private lines, and sell optical modules (ModuleSheep)
• Support in Japanese, English and Chinese: we coordinate between overseas customers and Japanese data centers

Main Sources

• Reuters (via Newsweek Japan): Tokyo market on November 6 (Japanese)
• Kyodo (via OANDA): Tokyo market on November 6 (Japanese)
• Fisco (via Investing.com): Nikkei contributions on November 6 (Japanese)
• Fisco (via Yahoo Finance Japan): Nikkei contributions on November 5 (Japanese)
• Reuters (via Newsweek Japan): Tokyo market on November 5 (Japanese)
• Yahoo Finance Japan: Nikkei 225 history
• Kyodo (via Kumamoto Nichinichi): June 25 record close (Japanese)
• Yahoo Finance Japan: Kioxia history
• Yahoo Finance Japan: Fujikura history
• Yahoo Finance Japan: Furukawa Electric
• Yahoo Finance Japan: Sumitomo Electric
• Yahoo Finance Japan: SAKURA internet
• Yahoo Finance Japan: NTT
• Yahoo Finance Japan: Dai-Dan
• Yahoo Finance Japan: Kajima
• Yahoo Finance Japan: Taisei
• Yahoo Finance Japan: Kandenko
• Yahoo Finance Japan: Mitsubishi Electric
• Yahoo Finance Japan: Hitachi
• Kabutan (via Matsui Securities): Sector ranking on November 6 (Japanese)
• Kabutan (via Matsui Securities): Tokyo market on October 30 (Japanese)
• MINKABU (via Matsui Securities): The market next week (Japanese)
• Kabutan (via Matsui Securities): Earnings next week (Japanese)
• Toyo Keizai: Kioxia results and shares (Japanese)
• Fisco (via Yahoo Finance Japan): Tokyo market on November 4 (Japanese)
• Traders Web (via Yahoo Finance Japan): Tokyo market on November 5 and next-day strategy (Japanese)
• Reuters (via Yahoo Finance): Asian markets fall
• TRT World: Global tech sell-off and the move to bonds
• Investing.com: Asian markets and AI shares (Japanese)
• Investing.com: SoftBank Group shares fall (Japanese)
• Reuters (via Newsweek Japan): The fall and the Takaichi government (Japanese)
• Asahi Shimbun (via Yahoo News Japan): Prime Minister Takaichi's remarks (Japanese)
• Getworks: Kushiro container data center (Japanese)
• Cloud Watch: Sendai plan (Japanese)
• fantasista: Basic agreement disclosure (Japanese)
• STT GDC: ¥93 billion green loan
• SoftBank Corp.: Tomakomai AI data center (Japanese)
• Cloud Watch: Akita plan (Japanese)
• Tohoku Electric: Use of the Akita plant site (Japanese)
• W.Media: KIX15 groundbreaking
• Hokkaido Government: Grid application solicitation (Japanese)
• Hitachi: Q2 earnings Q&A (Japanese)
• Nikkei: Daikin forecast (Japanese)
• Reuters (via Newsweek Japan): Mitsubishi Heavy Industries results (Japanese)
• KDDI: Q2 results presentation (Japanese)
• SAKURA internet: Q2 results presentation (Japanese)
• Nikkei: Kandenko first-half results (Japanese)
• Automation News: Fuji Electric first-half results (Japanese)
• NTT: Q2 results presentation (Japanese)
• SoftBank Corp.: Sakai AI data center, March 2025 (Japanese)
• Two Sheep: Japan data center investment report
• Nishinippon Shimbun: Kitakyushu plan (Japanese)
• Kitakyushu City: Mayor's press conference record (Japanese)
• OCCTO: FY2026 demand forecast (Japanese)
• TEPCO Power Grid: Current status (Japanese)
• NTT DATA: Inzai and Shiroi data centers (Japanese)
• JLL: Japan's data center market (Japanese)
• Cabinet Secretariat: Construction task force, METI material (Japanese)
• Cabinet Secretariat: Construction task force, MLIT material (Japanese)
• Turner & Townsend: Data centre construction cost index
• NEWSCAST: Turner & Townsend Japan report (Japanese)
• Bank of Japan: Foreign exchange rates, November 6
• Chiba Nippo: First hearing in the Inzai data center suit (Japanese)
• Okaasan no Ouchi: Inzai suit and district plans (Japanese)
• Tokyo Shimbun: Makinohara plan (Japanese)
• TV Asahi: 600 at Inzai briefing (Japanese)
• Nikkan Gendai: Opposition in Hino and elsewhere (Japanese)
• Tokyo Shimbun: Hino plan and review request (Japanese)
• Alterna: Akishima plan (Japanese)
• NEWS Tsukuba: Tsukuba plan (Japanese)
• Tokyo Metropolitan Government: Data center certification (Japanese)
• Tokyo Metropolitan Government: Data center guideline (Japanese)
• Bloomberg Opinion (via Taipei Times): Opposition in Japan
• Cabinet Secretariat: 9th Japan Growth Strategy Council material (Japanese)
• ITmedia Smart Japan: Rules on unused grid capacity (Japanese)
• Microsoft: FY27 Q1 earnings call
• CNBC: Microsoft and Google capital spending
• Alphabet: 2026 Q3 earnings call
• Amazon: Third quarter 2026 results
• CNBC: Amazon results
• Meta: Third quarter 2026 results
• CNBC: Oracle results
• Microsoft: $10 billion investment in Japan
• AWS: ¥2.26 trillion investment in Japan
• Oracle (via AAP): Investment in Japan
• AirTrunk: ¥191.6 billion financing
• Capacity: Osaka data center sale
• The Tech Capital: Digital Core REIT bonds
• CNBC: ING data center loans
• Nikkei: US AI data center lending (Japanese)
• W.Media: AirTrunk REIT listing delay
• Forbes JAPAN: Data center bonds (Japanese)
• Bank of Japan: Financial System Report, October 2026 (Japanese)
• FSA: 2026 Strategic Priorities (Japanese)
• Bloomberg (via The Edge Malaysia): The FSA's view
• Bank of Japan: Monetary policy statement, October 30
• Investing.com: JGB yields on November 6
• Trading Economics: Japan 10-year yield
• CRIEPI: Data center siting and grid connection (Japanese)
• CRIEPI: Understanding AI data centers (Japanese)
• SoftBank Group: Earnings briefing notice (Japanese)
• SoftBank Corp.: Earnings briefing notice (Japanese)
• Taisei: Investor relations (Japanese)
• Obayashi: IR calendar (Japanese)
• Yahoo Finance Japan: Shimizu
• NVIDIA: Third quarter results conference call notice

About This Article

• This article was compiled independently by Two Sheep from announcements by companies and public bodies, media reports and other public information available as of 22:30 Japan time on November 6, 2026. The US market had not opened for its November 6 session at that time. Markets and plans may change. Plans have not been carried out, and estimates and opinions are not established facts.
• Statements that we "found no" information refer only to the public information we checked. They do not mean that such facts do not exist.
• This article does not support or criticize any party, candidate or policy.
• This article is for information only and does not recommend any company, security or investment.
• Companies are named only to illustrate industry trends; their mention does not indicate any business relationship with Two Sheep. Names of companies, products and services are trademarks or registered trademarks of their respective owners.
• Contact: Japan@2sheep.jp, or use the contact form on this website.