Generative AI and Data Center Decentralization #3

This report is the third in a three-part series analyzing the link between the proliferation of generative AI and the geographical diversification of data center locations throughout Japan.

#3　Promising Areas for Decentralization

　　5. Promising areas for data center decentralization
　　　(1) Renewable energy generation potential
　　　(2)  Electricity costs
　　　(3)  Concentration of factories and other production bases
　　　(4)  Status of infrastructure
　　　(5)  Earthquake risk
　　6. Technological innovation and further acceleration of data center decentralization

Summary

Key criteria for the assessment of an area’s suitability as a location for the decentralization of data centers include the following: (1) renewable energy generation potential, (2) electricity costs, (3) industrial density,  (4) status of key infrastructure, and (5) risk of major earthquakes. Based on these factors, the areas most amenable to the construction of data centers are Hokkaido, Tohoku, Chubu, and Kyushu.

Innovative Optical and Wireless Network (IOWN) technology being developed by NTT has the potential to further accelerate data center decentralization. As a technology that will support next-gen communication infrastructure, it should allow for ultra-high communication capacity with ultra-low latency, along with ultra-low power consumption. The implementation of this technology will allow geographically distant data centers to coordinate virtually with one another. The advantages that major metropolitan areas have over regional areas as data center locations should gradually erode due to such technological innovations.