Sakura Internet is experiencing rapid expansion in its GPU cloud computing segment, reflecting booming demand for such services amid the artificial intelligence surge. The company plans to install 2,000 NVIDIA "H100" GPUs by June 2024 and anticipates revenues exceeding 5 billion yen from its GPU cloud services by March 2025. These bold strategies outline future revenue targets, aiming for between 10 to 20 billion yen by March 2026 and between 20 to 30 billion yen by March 2027.
President Kunihiro Tanaka remarked, "The demand is like the bottom has fallen out," underscoring the strong market for their GPU services. The company intends to deploy 800 H100 GPUs at Equinix Japan's Osaka data center by October 2024, alongside 1,000 other units at their Ishikari data center. Following this, Sakura Internet will begin installation of 1,072 units of the newer "H200" model by February 2025, as part of their larger strategy to prepare for increasing customer needs.
Recent investments are substantial, with roughly ¥11.05 billion earmarked for their Ishikari operations, followed by additional funding for future GPU deployments to address the strong market demand. This includes the need to upgrade their infrastructure at the Ishikari data center, which was first opened back in 2011. Initially, projections suggested the facility would meet capacity between 2030 and 2035, but the current demand trends have accelerated this timeline significantly.
Vice President Masaaki Tateishi also noted, “The operating rate of High Firepower is almost 100%, and customers are asking, 'When will the new servers come?'” Such statements indicate the current pressures on infrastructure to meet customer demands, highlighting the significant growth opportunity within this sector.
Underpinned by government support, the Ministry of Economy, Trade, and Industry (METI) has initiated programs aiding Sakura Internet's GPU cloud investments, which include substantial subsidies. Specifically, the Ministry provided financial backing for their plans of ¥130 billion for GPU cloud investments—secured aid up to ¥68 billion—and will extend support for future investments projected to reach over ¥1 trillion by April 2024, covering up to ¥501 billion of those plans.
This governmental support highlights the Japanese government's commitment to advancing cloud technology as part of its broader economic security program. Amidst increasing global competition, nurturing domestic GPU capabilities is seen as pivotal for ensuring Japan maintains its technological prowess.
Despite the rapid pace of development, challenges loom on the horizon for Sakura Internet. There are concerns about adequate power supply and installation space at the Ishikari center as plans exceed initial expectations to meet high user demand. The company is investigating whether to expand its current facilities or establish new locations to house the additional GPUs required to meet anticipated customer needs.
Sakura Internet’s ambitious investment strategy and rapid scale-up efforts are closely tied to the broader rise of artificial intelligence—an area seemingly destined for continued growth. With AI applications increasingly driving the demand for cloud computing services, Sakura Internet is positioning itself at the forefront of this pivotal technology shift.
Looking forward, the firm aims to establish 10,000 GPU units by fiscal year 2030, requiring extensive planning and resource allocation to meet these expansive goals. The future of Japan's GPU cloud computing market seems undeniably linked to trends within AI and other data-intensive technologies, which will influence not just Sakura Internet but the entire tech ecosystem nationwide.
From this significant investment surge and ambitious future outlook, Sakura Internet is experiencing remarkable transformations, which speaks volumes about the current climate of Japan's tech sector and the surge of cloud computing opportunities. This pivotal moment marks not just the company's growth but also serves as a bellwether for the broader tech industry and its potential innovations in the near future.