A Japanese city is getting ready to build what’s shaping up to be the nation’s biggest data center hub. Officials plan to announce details this Friday.

Nanto, a city in Toyama prefecture near the Sea of Japan coast, is teaming up with private developer GigaStream Toyama. They’re planning a facility with 3.1 gigawatts of total power. That makes it the country’s third major data center spot, according to documents Reuters obtained.

Japan’s racing to meet surging demand for computing power that artificial intelligence needs. Once it’s done, this will be one of the world’s largest facilities. The scale matches up with OpenAI’s Stargate project, which has a $500 billion price tag and 10 gigawatts of capacity.

Finding good spots outside Tokyo and Osaka has been tough. Right now, those two regions hold about 85 percent of the country’s data centers. Government officials have been pushing to spread these around more to ease the bottlenecks.

What makes Nanto an ideal location?

Nanto has several things working in its favor. The city is about 250 kilometers from Tokyo and Osaka. That’s close enough to reach the big population centers without being right on top of them. But the bigger selling point is safety. Toyama is among the prefectures with the fewest big earthquakes, according to the Japan Meteorological Agency.

The first phase of the Nanto Campus will support about 400 megawatts of power. That’s equal to some of Japan’s largest data centers announced so far. It can handle big operators like Amazon, Microsoft, and Google.

The site will be up and running by the end of 2028, based on the public-private plan.

GigaStream Toyama focuses on getting infrastructure ready for data center operators to use. It’s similar to what U.S.-based companies Lancium and Tract do. The company plans to start promoting the Nanto Campus at next month’s Pacific Telecommunications Council conference in Honolulu.

Daniel Cox heads up GigaStream Toyama. He’s spent 25 years in Japan’s real estate investment market.

Officials at both Nanto city and GigaStream Toyama wouldn’t comment when asked. They said they’ll make an announcement soon according to Reuters.

Market’s Growing Fast

Cloud and AI services are pushing Japan’s data center market to grow fast. IDC Japan forecasts the market will almost double to more than 5 trillion yen in the five years through 2028. That’s $32 billion.

The government’s counting on this sector to help hit its goal of bringing in 120 trillion yen in foreign direct investment by 2030. That’s up from 53.3 trillion yen in 2024.

Power’s more abundant and generally cheaper in western Japan compared to the east. Multiple utilities service the area – Hokuriku Electric Power, Kansai Electric Power, and Electric Power Development, along with smaller operators.

Hokuriku Electric sells less than half of its maximum output even without its idled Shika nuclear power plant running.

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