UAE's Mubadala in Talks to Back 500MW Bitgrit & S2 Data Center in Akita, Japan

The United Arab Emirates' sovereign wealth fund Mubadala Investment Company is in discussions to invest in a major data center project in Akita, a northern city in Japan. The proposed facility, led by US-based startup Bitgrit and local technology firm S2, is expected to carry a total project value of two trillion yen, equivalent to approximately $12.6 billion.

According to Shihab Alfaheem, the UAE ambassador to Japan, Mubadala could contribute up to one trillion yen toward the development of the data center. The investment, if finalized, would mark one of the largest foreign capital commitments to Japan's growing digital infrastructure sector and underscore the deepening economic ties between the UAE and Japan.

The data center is projected to reach a maximum capacity of 500MW and is slated to become operational by 2033. Prior to that larger build-out, Bitgrit plans to launch a smaller 1.5MW facility in Akita by the end of 2027, serving as an initial deployment to establish a local presence and validate operational capabilities.

Bitgrit and S2 first signed a memorandum of understanding with the city of Akita in October of the previous year, forming a joint special purpose company to drive the project forward. Bitgrit specializes in Web3.0 and AI blockchain systems, and also works with organizations to train models on private data. S2, based in Akita, is a local server management firm that gained attention in 2021 for launching Japan's first professional esports team composed of elderly players, named the Matagi Snipers.

The potential investment comes at a time when data center demand in Japan is surging, driven by the expansion of AI workloads, cloud services, and digital transformation initiatives across both public and private sectors. Akita, while not traditionally a major data center hub, offers advantages including available land and access to regional power resources, making it an increasingly attractive site for large-scale infrastructure projects.

If the Mubadala-backed project proceeds, it could catalyze further investment in Japan's northern regions, helping to balance the concentration of digital infrastructure in Tokyo and Osaka. The scale of the proposed 500MW facility would place it among the largest data center projects in the country, with significant implications for the local economy, energy planning, and the broader Asia-Pacific data center market.