Nvidia-Backed Firm Eyes Data Center Near Japan’s Nuclear Power

(Bloomberg) -- An Nvidia Corp.-backed cloud services firm wants to build a new data center in Japan, with one prerequisite: there should be nuclear power available nearby. 

Tokyo-based Ubitus K.K. is looking to acquire land in Kyoto, Shimane or a prefecture in Japan’s southern island of Kyushu, primarily because of the availability of nuclear power in the region, Chief Executive Officer Wesley Kuo said in an interview on Thursday. The firm, which already has two data centers for gaming, plans to build a third to serve generative artificial intelligence, he said.

“Unless we have other, better, efficient and cheap energy, nuclear is still the most competitive option in terms of cost and the scale of supply,” Kuo said, adding that renewables like solar and wind power are too intermittent. “For industrial use — especially AI — they need a constant, high-capacity supply.”

Ubitus, which received funding from Nvidia earlier this year, joins a growing list of tech companies at the forefront of a global revival in nuclear power, as use of AI and data centers drives up demand for emissions-free, stable electricity. Amazon.com Inc., Alphabet Inc.’s Google and Microsoft Corp. are among the giants that have recently made investments to gain access to atomic energy. 

However, securing nuclear power in Japan remains challenging given sensitivities over the 2011 Fukushima disaster and the strict regulatory framework put in place in its aftermath. The country now has 33 commercially operable reactors left, but many remain idle.

Ubitus aims to select a location for its new data center during the first quarter of next year, Kuo said, adding he has visited sites in Kyoto and Shimane, with plans to travel to Kyushu as well. The firm already operates two data centers for gaming in Japan, in partnership with Nippon Telegraph & Telephone Corp. 

Setting up a data center in these areas would allow access to a grid with cheap and stable electricity thanks to the nuclear facilities, said Kuo. That’s a slightly different approach from the US tech giants, which have been signing deals to directly purchase power from or build nuclear plants.

Japanese regions with nuclear power plants, like the western Kansai area and Kyushu, generally have lower electricity rates.

Kyoto is close to several nuclear power plants operated by Kansai Electric Power Co., while Kyushu is home to four units managed by Kyushu Electric Power Co. Chugoku Electric Power Co. is  scheduled to restart its Shimane No. 2 reactor in December. 

The cloud-based gaming services provider was originally founded in Taiwan in 2007, and is now based in Tokyo, with partners including Nintendo Co. Its existing data centers are located in Tokyo and Osaka to be close to gaming clients. But for generative AI, the priority becomes more about the size of energy supply and electricity price, Kuo said. 

Ubitus will aim for its new data center to have power-receiving capacity of 2-3 megawatts in the initial phase of the operation, with plans to potentially expand to up to 50 megawatts, he added.