(Bloomberg) — Sakura Internet Inc.’s next data center will likely be complete by the time it comes online in three years, prompting the Japanese government’s local area network provider to accelerate its purchases of graphics processing units from Nvidia Corp.

The Osaka-based company, an alternative in Japan to data centers operated by Microsoft Corp., Alphabet Inc.’s Google and Amazon.com Inc., is seeking to accelerate the pace of its investments with talks to buy some 10,000 Nvidia GPUs every year to meet growing demand, according to its founder Kunihiro Tanaka.

“We need 50,000 to 100,000 Nvidia GPUs to comfortably meet the demand we’re seeing today,” the 46-year-old CEO said in an interview. “We would need a million GPUs in 10 years, if demand grows at the current rate.”

Sakura Internet benefits from the desire of Japanese policymakers and companies to develop AI infrastructure throughout the archipelago. The company is building a data center that is expected to house about 10,800 Nvidia GPUs when it comes online by 2027 on the northern Japanese island of Hokkaido, with the government footing about half the cost of more than 100 billion yen ($650 million).

The most advanced Nvidia GPUs can cost millions of dollars, supported by persistent global demand. Sakura Internet plans to capitalize on its years-long relationship with Nvidia to secure GPUs, Tanaka said, without elaborating.

Sakura’s current capacity is now full, with a years-long waiting list that includes national research institutes, universities and companies, Tanaka said. The company, which so far caters to customers based in Japan, hopes to meet demands from overseas as it increases its computing power, he said. Sakura Internet has announced plans to spend an additional 8.7 billion yen on GPUs over the next two months.

Demand for IT may come in fits and starts, but growth will continue over the long term, Tanaka said. Data center usage will increase exponentially when cars and appliances are able to harness AI, he said, while doubting whether AI will fundamentally change the smartphone or desktop experience. PC.

To meet demand, the data center industry may eventually have to build its own power plants, said Tanaka, who also chairs the Japan Data Center Council. In the city of Inzai, where many data centers are clustered just northeast of Tokyo, Tokyo Electric Power Co. and companies cooperated to build a substation, he said.

Founded in 1996, Sakura Internet was the first Japanese company tapped by the country’s government to build public cloud infrastructure. It competes with NTT Data Group Corp. and SoftBank Corp.

Nvidia’s GPUs are “the only option” for Sakura Internet in terms of providing the required computing power, although the company will continue to evaluate alternatives, such as offerings from Intel Corp., Advanced Micro Devices Inc. and Qualcomm Inc., Tanaka said.

“Our customers want progress and results,” he said. “What matters to them is power, not cost. »

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