SoftBank and OpenAI to Transform Former Sharp LCD Plant into Major AI Agent Hub in Japan

SoftBank Corp. is set to acquire a defunct Sharp LCD panel plant in Sakai, Osaka, for approximately 100 billion yen ($676 million) to establish a cutting-edge data center focused on developing and deploying AI agents, Nikkei Asia reported. The move, part of a broader collaboration with U.S.-based OpenAI, represents a significant step in Japan's push for AI leadership and data sovereignty.

The deal, expected to be finalized as early as Friday, will see SoftBank acquire the facilities and part of the land at the former Sharp TV display plant. Construction is slated to begin in fiscal 2025, with operations commencing in 2026. The data center's initial power capacity will be 150 megawatts, making it one of the largest in Japan, with plans to expand to 250 MW by fiscal 2028.

AI agents, described as autonomous programs capable of making decisions and carrying out tasks based on user-defined parameters, represent a significant advancement beyond current AI chatbot technology. Companies like Google are actively pursuing their development.

The Sakai facility will be a key node in the development and deployment of these advanced AI agents. OpenAI will provide the base AI agent model, a world-first commercialization effort, and contribute graphics processing units (GPUs) essential for AI development and training. A joint venture between SoftBank Corp., parent company SoftBank Group, and OpenAI will then customize these AI agents for individual client companies, leveraging their data in areas like human resources and marketing.

The project is closely linked to the "Stargate Project," a $500 billion AI infrastructure initiative unveiled earlier this year by SoftBank Group CEO Masayoshi Son, U.S. President Donald Trump, OpenAI CEO Sam Altman, and Oracle Chairman Larry Ellison. Stargate aims to help the United States maintain its lead in the global AI race, and the Sakai data center is expected to procure GPUs from both Nvidia and the Stargate Project itself. Bringing the facility to full operation will require an estimated 100,000 GPUs, representing a potential investment approaching 1 trillion yen ($6.7 billion).

This massive investment underscores SoftBank's commitment to AI as its core future growth strategy, despite recent financial challenges. The company reported a $2.4 billion loss in the latest quarter, driven by losses in its Vision Fund investments. To finance its AI ambitions, SoftBank is reportedly in talks to borrow up to $16 billion, with plans to potentially borrow another $8 billion in 2026.

The Sakai project also highlights the growing importance of data sovereignty. By developing and operating AI agents within Japan, SoftBank aims to address concerns about managing sensitive corporate data within national borders. The facility will not only support the joint venture with OpenAI but also develop SoftBank's own generative AI base model and be available for rent to domestic companies and research institutions.

For Sharp, the sale represents a crucial step in its financial recovery. The company suffered significant losses in its LCD panel business, totaling 410 billion yen over the two years ending March 2024. The sale of the Sakai facility is expected to generate an extraordinary profit, helping Sharp return to profitability.

SoftBank Corp. plans to build a network of AI data centers across major Japanese cities. Sakai will be its third, following an operational facility in Tokyo and one under construction in Hokkaido. A potential site has also been identified in Kyushu.