11/1/2026

We Have Published "Japan's Data Centers in October 2026: Industry Report"

Based on public information, we compiled 31 notable data center announcements and news reports from Japan in October 2026. The report covers plans for data centers using power-plant electricity; new builds and financing in Kansai, Greater Tokyo and the regions; IOWN APN and subsea cables; AI compute services; and grid-connection rule changes. It also outlines the challenges of power, timelines and on-site work, and introduces the services Two Sheep provides.

Two Sheep Co., Ltd. has published "Japan's Data Centers in October 2026: Industry Report," a roundup of the main data center announcements in Japan during October 2026. We compiled it independently from company press releases and other public information available as of October 2026. It is a companion to "Japan Data Center Investment Trends: October 2026 Report", published on 28 October, so topics covered there are mentioned only briefly here. Items based on news reports are marked as such.

Key Points

Scope: 31 notable data center announcements and news reports in Japan in October 2026 (new builds and construction, power-plant power, networks, AI compute services, power and policy)
JERA, Dell Technologies and RHAELM plan an up-to-400 MW AI data center at the Chiba Thermal Power Station (MoU stage). Hitachi and three partners are teaming up on power-co-located green data centers
New builds: MC Digital Realty started construction of KIX15 (24 MW of server power capacity) in Ibaraki, Osaka Prefecture. An underground data center in an existing tunnel in Kobe was also announced
IOWN APN trials continued: Tokyo–Hokkaido storage integration (over 1,000 km) and 750+ Gbps transfers between Kobe and Kashiwa. Four subsidy projects to spread subsea cable landings were also selected
Most projects are plans aiming to start in 2028 or later. We believe power and grid access, timelines, and on-site work driven by liquid cooling and dispersed sites will remain challenges

1. Main Announcements in October

Below are the main announcements and news reports of October 2026 in date order (dates in Japan time; status as of each announcement).

1 October JERA, Dell Technologies and RHAELM: signed an MoU covering an AI data center at the Chiba Thermal Power Station, among other things
1 October Ministry of Internal Affairs and Communications (MIC): announced that the "APN Innovation Hub," an APN test environment, would open on 5 October
2 October DayOne: announced plans for a data center campus in Imari, Saga Prefecture
5 October Mitsui Knowledge Industry and NTT DOCOMO BUSINESS: reported results of a genome-analysis trial using GPUs at five sites across Japan
6 October Mitsui Fudosan, Kumagai Gumi and Getworks: announced the development of an underground data center in Kobe
6 October NTT DATA Group: announced a trial of HVO biofuel in emergency generation equipment
6 October Agency for Natural Resources and Energy (ANRE): discussed grid-connection rules for large-scale demand at an expert working group
7 October MC Digital Realty: started construction of KIX15 in Ibaraki, Osaka Prefecture
7 October GMO Internet and partners: announced a new "GMO GPU Cloud" site in Ishikari
7 October Reported (Reuters): AirTrunk is investing an additional US$1 billion in its campus in Inzai, Chiba Prefecture
7 October MESH-X and 11 other parties: announced a social demonstration of wide-area workload shifting
8 October J-POWER and four other companies: began a workload-shift demonstration between Yokohama and Kitakyushu
8 October SAKURA internet: launched a private edition of its "AI Engine" service
9 October MIC: selected four projects under a subsidy program to spread subsea cables to the regions
13 October Reported (Nikkei): talks between NTT DATA Group and Anthropic on a data center in Osaka (no official announcement; covered in our previous report)
15 October City of Kitakyushu: explained that the APL Group has put off the start of construction of its data center's main facility
15 October MIC: selected the administering body for a subsidy program supporting the regional dispersion of data centers and similar facilities
19 October Hitachi, Brookfield Japan, Hartree Partners Singapore and Tokyo Gas: announced a collaboration on power-co-located green data centers
20 October Hokkaido Government: opened a call for operators to take over its power applications in Ishikari and Tomakomai (covered in our previous report)
21 October SAKURA internet and Internet Multifeed: announced a technical trial connecting JPNAP Sapporo and the Ishikari Data Center
22 October Equinix: launched "EPIC," a program with liquid-cooling facilities, at sites including Osaka OS3
22 October KDDI and Broadcom: began joint verification of CPO switches
23 October NTT DATA Group, MUFG Bank and NTT West: reported results of a technical trial of a distributed database over IOWN APN
23 October Datasection: began providing GPU compute services
27 October STT GDC: secured a JPY93 billion green loan for TYO1 and TYO2 in Inzai
27 October Broadband Tower and NTT East: reported results of a Tokyo–Hokkaido storage integration trial
27 October City of Utsunomiya: selected the Mitsubishi Estate Group as preferred negotiator for a data center development
27 October KDDI: announced an expanded inference environment at its Osaka Sakai Data Center (covered in our previous report)
28 October SAKURA internet: announced first-half results and raised its full-year forecast
30 October National Institute of Informatics (NII) and four other organizations: reported results of transfers over an 800 Gbps direct link between Kobe and Kashiwa
30 October Shikoku Electric Power: announced its "Shikoku Digital Gateway" concept and the start of a study on a data center business in Ehime Prefecture

2. Data Centers Using Power-Plant Electricity

In October, several plans emerged to build data centers that use electricity from power plants. The stated aims include reducing over-reliance on the grid and shortening the time to start operation. All are at the MoU or study stage.

JERA, Dell Technologies and RHAELM (1 October): The first project is an AI data center of up to 400 MW at JERA's Chiba Thermal Power Station in Chiba City. Total investment is expected to exceed US$15 billion (about ¥2.3 trillion), and the partners aim to start operation around 2028. Power would be supplied on-site from JERA's existing generation, with the aim of delivering compute capacity several years earlier than a conventional grid-connected development. Apollo Global Management intends to join as RHAELM's investment and financing partner, and a rollout to other JERA thermal plants is being studied in parallel
Hitachi and three partners (19 October): The four companies aim to develop a standard model for "power-co-located green data centers" that use on-site generation as base power, combined with batteries and grid power. As first projects, they plan to draw up development plans in the Kanto and Kyushu regions; no sites, capacity or investment have been disclosed. Tokyo Gas joined a three-company collaboration announced in July 2025
Shikoku Electric Power (30 October): The company said it will begin studying a local-production, local-consumption scheme to supply data centers and similar facilities with decarbonized power from Ehime Prefecture, centered on the Ikata nuclear power station, as well as a generative-AI data center business in Ehime's Nanyo region. No capacity or timeline was given

Separately, on 11 September Tohoku Electric Power said the site of its former Akita Thermal Power Station is a promising candidate where a 1 GW-class data center cluster is expected, and that it is in talks with interested operators.

3. New Builds, Construction and Financing

Ibaraki, Osaka Prefecture: MC Digital Realty, a joint venture of Mitsubishi Corporation and Digital Realty, started construction of KIX15, the fifth data center on its KIX campus. It is planned at 24 MW of server power capacity, with service scheduled to begin in Q4 2028, and supports hybrid air and liquid cooling. Once it opens, MC Digital Realty plans to operate 10 data centers in Japan with about 220 MW of server power capacity in total
Kobe: Mitsui Fudosan, Kumagai Gumi and Getworks will develop an underground data center using about 3 km (about 17,000 m²) of a 14.5 km tunnel once used for a soil-transport belt conveyor. Most of the tunnel lies about 40 m or more underground, and its interior stays at 15–20°C year-round. The initial phase is planned to start service at the end of 2027, and the long-term aim is to operate at a maximum power-receiving capacity of about 20 MW
Liquid cooling in Osaka: Equinix launched "EPIC," a program offering production-ready liquid-cooling facilities, at five sites including Osaka (OS3), with more sites planned for 2027
Inzai, Chiba Prefecture: STT GDC secured a JPY93 billion green loan for TYO1 and TYO2, which are planned to provide 70.8 MW of IT capacity combined. One condition is a design PUE of 1.3 or below, and TYO2 is being developed with provision for future liquid cooling. Reuters reported that AirTrunk is also investing an additional US$1 billion in its Inzai campus of more than 300 MW to deploy liquid cooling for AI, and has secured a US$1 billion green loan
Utsunomiya: The city selected the Mitsubishi Estate Group (Mitsubishi Estate, East Japan Railway Company and Digital Edge Japan) as preferred negotiator for a data center development south of the Shin-Tochigi Substation (about 37 ha, maximum supply power 400 MW). Under the proposal, the first of four buildings would start operating in FY2030 and all buildings by around FY2035 (subject to change)
Kyushu: DayOne plans a phased campus in Imari, Saga Prefecture, with 200 MW of grid power and 160 MW of secured powered land, targeting 2030 for its initial phase. According to the City of Kitakyushu, the APL Group has put off, for business reasons, the November construction start of its data center's main facility in the Hibikino area, and plans to start by the end of March 2027 (within FY2026)
Hokkaido: The call for data center operators to take over the Hokkaido Government's power applications in Ishikari and Tomakomai is open until 4 December (covered in our previous report)

4. Networks: IOWN APN and Subsea Cables

IOWN APN Trials

Results kept coming from trials linking distant sites over the all-photonics network "IOWN APN." All figures were obtained in specific test environments.

Tokyo–Hokkaido (27 October): Broadband Tower and NTT East linked Broadband Tower's data center in Otemachi, Tokyo, with an NTT East telecom building in Sapporo over a 100 Gbps line, testing storage at two sites more than 1,000 km apart as a single system. One-way latency was 7.14 ms, and the difference in time to read large files from the remote site was under one second
Kobe–Kashiwa (30 October): NII, RIKEN, the University of Tokyo, NTT East and NTT West directly linked the RIKEN Center for Computational Science (Kobe) and the University of Tokyo's Kashiwa campus (Kashiwa, Chiba Prefecture) with an 800 Gbps line and recorded a peak transfer rate of about 775 Gbps
Distributed processing: NTT DATA Group, MUFG Bank and NTT West confirmed that a database spread across three domestic sites handled about 1.7 times as many transactions per unit of time as a simulated IP-VPN under simulated 1,000 km conditions. Mitsui Knowledge Industry and NTT DOCOMO BUSINESS used GPUs at five sites across Japan to cut genome-analysis processing time to 25–29% of the single-site time

Spreading Subsea Cable Landings

On 9 October, MIC announced the four projects selected by the fund-holding body under a subsidy program to spread subsea cable infrastructure to the regions: SoftBank (Tomakomai, Hokkaido), IPS (off Wakayama City), IPS Pro (Wakayama City) and Shikoku Electric Power (Anan, Tokushima Prefecture, onshore and offshore). On 30 October, Shikoku Electric Power announced that it will invest in and join "AUG-East," a subsea cable linking Japan, Singapore and other locations (about 8,900 km long, planned to start operation in FY2029), and land a branch line in Anan. According to the company, Shikoku currently has no international subsea cable landing station.

5. AI Compute Services and GPU Cloud

Datasection: Under a contract signed in September with a US-headquartered customer (name not disclosed), worth ¥139,923 million in total over five years (including an extension option), the company has been operating GPU compute services since October. The location of the GPU cluster has not been disclosed. Proceeds from its stock acquisition rights fell about ¥28.6 billion short of plan, and the company says it is considering the best way to finance its AI data center projects
SAKURA internet: Operating profit for April–September 2026 was ¥2,963 million (against an operating loss of ¥920 million a year earlier), which the company attributes mainly to high utilization of its NVIDIA H100, H200 and B200 GPUs. It raised its full-year operating profit forecast to ¥4,100 million (from ¥2,500 million)
KDDI: KDDI plans to install NVIDIA HGX Rubin NVL8 at its Osaka Sakai Data Center in FY2027 (covered in our previous report). Because the system is designed to run with coolant up to 45°C, free cooling with outside air can be used, which KDDI says cuts cooling power by up to 90%. On 22 October, it also began joint verification of CPO switches under a technology partnership with Broadcom
GMO Internet: The company announced a new "GMO GPU Cloud" site at Ishikari RE Data Center No. 1 (15 MW power-receiving capacity for the whole facility), aiming to start operation within 2026

6. Power, the Grid and Government Policy

Revising Grid-Connection Rules

At its Next-Generation Power Grid Working Group on 6 October, ANRE discussed grid connection for large-scale demand.

In effect from October: two rules now apply: paying the construction cost contribution within three months of supply acceptance, and cancelling applications whose contents are defective or have changed
From April 2027 (planned): for customers with contracted power of 30 MW or more, measures against "capacity hoarding" (reserving grid capacity that goes unused), combining capacity release and cost settlement, are planned to start
Demand outlook: peak demand from new and expanded data centers is expected to be about 6 GW (6 million kW) higher in FY2035 than in FY2026 (the FY2026 forecast of the Organization for Cross-regional Coordination of Transmission Operators, OCCTO)

Watt-Bit Collaboration and Subsidies

Under MIC's "Watt-Bit collaboration" demonstration program, J-POWER and four other companies announced that they had begun a demonstration that moves AI processing between AI data centers in Yokohama and Kitakyushu according to renewable output forecasts, power trading prices and other factors (8 October). MESH-X and 11 other parties also announced a wide-area social demonstration that links communications, power and compute (7 October). Both are scheduled to run from August 2026 to February 2027. On 15 October, MIC selected the administering body for a program that subsidizes the regional dispersion of data centers and internet exchanges (IX), and the call for projects is still to come.

7. The Challenges: Power, Timelines and On-Site Work

October's announcements point to several challenges shared across the industry.

Power and grid connection: In Hokkaido's call, the estimated grid connection dates are August 2030 or later for Tomakomai and October 2031 or later for Ishikari. Using power-plant power and the measures against capacity hoarding both relate to these wait times and capacity limits
Timelines and plan changes: Most new builds are still at the MoU or plan stage, with first-operation targets ranging from the end of 2027 to FY2030. In Kitakyushu, the start of construction of a main facility has been put off
Financing: Some projects raise funds through green loans (STT GDC, and AirTrunk as reported), while other companies are still considering how to finance their plans
Liquid cooling and dispersed sites: Announcements of liquid-cooling-ready facilities keep coming, including KIX15, EPIC, TYO2 and KDDI. Setups that use distant sites as one system over IOWN APN are also being tested

We believe that installing equipment with liquid-cooling systems and fiber cabling, and moving equipment into and between multiple sites, will make on-site data center work more complex and increase its volume. Looking ahead to 2028 and beyond, when many of the new sites are due to start operating, we believe securing the capacity to carry out this work reliably on site will be a challenge.

8. What Two Sheep Co., Ltd. Provides

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

Our work has included moving 100 production servers from Equinix TY8 to AT TOKYO CC1 (completed within the planned maintenance window), door-to-door delivery and customs clearance of network equipment to 29 sites in 16 countries across Latin America and the Caribbean, and cold/hot aisle containment, cable tray and power cabling work at Equinix HK3 in Hong Kong (completed in June 2026).

Main Sources

About This Report

This report was compiled independently by Two Sheep from company and local government press releases, government documents, news reports and other public information available as of October 2026. Items based only on news reports are marked as such. Company plans may change. This report is for information only and does not recommend any company or investment.
Companies and organizations are named only to illustrate industry trends; their mention does not indicate any business relationship with Two Sheep. Company, product and facility names are trademarks or registered trademarks of their respective owners.
Contact: Japan@2sheep.jp, or use the contact form on this website.