OpenAI Launches First Asian Office in Tokyo Amid Microsoft's Massive AI and Cloud Push in Japan

Author: Anusuya Lahiri | April 15, 2024 07:21am

Microsoft Corp (NASDAQ:MSFT)-backed OpenAI, the entity behind the widely acclaimed ChatGPT generative AI chatbot, has expanded its global presence by opening its first Asia office in Tokyo, Japan. 

This strategic move aims to cultivate new revenue streams by engaging with regional businesses. 

Reuters reports that OpenAI’s CEO Sam Altman and COO Brad Lightcap have been actively engaging with executives from Fortune 500 companies in the United States and Britain, pitching OpenAI’s capabilities and business applications.

The decision to establish a presence in Japan followed Altman’s discussions with Prime Minister Fumio Kishida last year. 

This showcases the country’s interest in leveraging AI technology to stay competitive, especially against China’s technological advancements. 

Japan aims to harness AI for digital transformation and mitigate the challenges posed by its aging population and labor shortages.

OpenAI announced it has developed a custom model optimized for the Japanese language, signaling its commitment to providing localized AI solutions. 

Tadao Nagasaki, former president of Amazon Web Services in Japan, has been appointed to lead OpenAI’s efforts. 

This initiative is part of Japan’s broader push towards adopting AI despite being considered behind in technological adoption compared to other nations. Local giants like SoftBank and NTT invest in AI technologies, including large language models.

Japan has become a top destination for tech firms seeking to lessen their reliance on China, further fueled by the artificial intelligence boom.

Microsoft recently announced a significant investment of $2.9 billion over the next two years in cloud and AI infrastructure in Japan.

During Prime Minister Kishida’s visit to the Kumamoto plant, Taiwan Semiconductor Manufacturing Co (NYSE:TSM) CEO C.C. Wei declared the company’s aim to locally source 60% of the materials for its inaugural Japanese chip manufacturing plant by 2030. 

The Japanese government has backed TSMC’s initiative with a ¥476 billion ($3.1 billion) investment for the first factory and an additional ¥732 billion in subsidies for a second facility. 

TSMC’s Kumamoto site will start producing logic chips for various applications by the end of the year. 

Meanwhile, Amazon.Com Inc (NASDAQ:AMZN) Amazon Web Services plans a $15.5 billion investment in Japan from 2023 to 2027 to expand its data centers and enhance its local operations.

Microsoft stock gained over 46% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund – Technology (NYSE:XLK) and Fidelity MSCI Information Technology Index ETF (NYSE:FTEC).

Price Action: MSFT shares closed lower by 1.41% at $421.90 on Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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