Japan's KDDI Plans ¥1 Trillion Investment in AI and Cloud Infrastructure Over Three Years

en.Wedoany.com Reported - Japanese telecommunications operator KDDI is stepping up its investment in AI integration, cloud infrastructure, and data centers, with its latest financial results showing strong growth in these businesses and disclosing a ¥1 trillion (approximately $6.27 billion) growth investment framework over three years.

KDDI reported that revenue from AI integration and cybersecurity grew 19.2% year-on-year in the first quarter of fiscal 2027, cloud infrastructure revenue grew more than 30% year-on-year, and operating revenue from its connected data center business rose 20.6%. Nanae Saishoji, Senior Managing Executive Officer and Chief Financial Officer at KDDI, said in an investor conference call that a secure cloud environment is a prerequisite for AI implementation, and the company is leveraging its group strengths to accelerate related deployments. She also noted that the connected data center business is absorbing AI inference demand, with operating revenue in this segment up 20.6% year-on-year, EBITDA growing at a similar pace, and EBITDA margin exceeding 40%.

AI-related growth is also reflected at the project level. Hiroaki Hosoi, Managing Executive Officer and Executive Director of the core business division, said that since the launch of the new KDDI iret business in April, the company has captured very strong demand, with new AI projects in this business reporting threefold growth. He also stated that the cloud infrastructure business will continue to expand, having traditionally been centered on AWS and now extended to Google, Oracle, and Microsoft.

Tomohiko Katsuki, Managing Executive Officer and Chief Strategy Officer, explained that KDDI's AI investment is divided into organic capital expenditure and long-term growth investment, with growth investment covering areas such as physical AI, cloud business, and applications. KDDI's AI data center in Sakai has already been adopted by multiple customers, including autonomous driving companies.

The financial results show that KDDI's first-quarter operating revenue grew 5.1% year-on-year, adjusted operating profit rose 21.1%, and adjusted net profit increased 21.6%, with the full-year revenue forecast maintained at ¥1.21 trillion.

In May of this year, KDDI announced a new three-year strategy covering April 2026 to March 2029, centered on artificial intelligence, infrastructure expansion, and 6G readiness, in preparation for an "AI-native society." The plan was formulated following the completion of the previous medium-term plan, which covered network infrastructure investment, AI-driven customer engagement initiatives, and the acquisition of a 50% stake in Japanese convenience store chain Lawson. The new plan is designed around the expectation that AI will become increasingly integrated into daily life rather than remaining a standalone technology tool, with its core component being the "Digital Belt" initiative, which includes expanding low-latency transmission and access networks, AI data center infrastructure, satellite ground stations, and submarine cable landing facilities.