Microsoft is about to pump billions more into AI data centers

• Microsoft plans to invest $2.9 billion in AI data centers in Japan by 2025.
• It's the latest big push by the tech giant to boost its AI business.

Microsoft is investing some serious capital in new AI data centers, and Japan is the latest country to benefit.

The tech giant plans to pour $2.9 billion into AI data centers in Japan by 2025, the company confirmed to Business Insider.

As part of its investment — the company's largest ever in Japan — Microsoft will place advanced AI semiconductors in two of Japan's existing data centers, Nikkei Asia reported.

Microsoft's investment plans also include developing an AI training program for 3 million workers in Japan over a three-year period, as well as building an AI and robotics research lab in Tokyo that will fund $9.9 million worth of research projects over a five-year period, the company confirmed.

And Microsoft said it plans to work with the Japanese government to improve its cybersecurity practices.

"The competitiveness of every part of the Japanese economy...will depend on the adoption of AI," Microsoft President Brad Smith told Nikkei Asia.

"The threat landscape for cybersecurity has become more challenging," Smith told Nikkei Asia. "We're seeing that from China and from Russia in particular, but we're also seeing growing ransomware activity around the world."

Partnerships like this, between governments and leading tech companies, are essential for a country to beef up its security, Smith added, according to Nikkei Asia.

Nikkei Asia reported that Microsoft would officially announce the investment soon. Representatives for Microsoft did not immediately respond to a request for comment from Business Insider.

Japan, like other countries around the world, has been racing to keep up with the US's dominance in artificial intelligence technology and computing. And data sovereignty — where a country manages its own data domestically — is critical to protecting its national security and privacy.

Microsoft has been on an AI investment tear. In November, the tech giant announced a £2.5 billion investment in UK data centers to help the country expand its AI infrastructure.

And just this week, Microsoft's Mustafa Suleyman said the company is opening up an AI hub in London — a move that could help Microsoft attract the country's top tech talent over competitors like Google.