Oracle announced plans to invest more than $8 billion toward growing its cloud computing footprint in Japan over the next decade. With this financial investment, the vendor claims to be the sole hyperscale cloud provider able to deliver artificial intelligence (AI) and a portfolio of more than 100 cloud services on a local scale, anywhere in the world.

The $8 billion investment to expand Oracle Cloud Infrastructure (OCI) throughout Japan is also targeted at addressing digital sovereignty requirements for organizations operating in the country. In particular, the vendor plans to enhance its Japan-based data center operations and engineering support teams with local personnel.

Oracle aims to increase local customer support for its public cloud regions in Osaka, Japan, and Tokyo, Japan, and the respective local operations teams for cloud infrastructure platform Oracle Alloy and OCI Dedicated Region, the vendor’s sovereign cloud offering.

Oracle’s investment in Japan serves to enable businesses and governments in the region to continue shifting mission critical workloads to OCI while taking advantage of sovereign AI services, which can be delivered within a country’s borders or an organization’s physical premises to maintain governance, compliance and security policies.

“By growing our cloud footprint and providing a team to support sovereign operations in Japan, we are giving our customers and partners the opportunity to innovate with AI and other cloud services while supporting their regulatory and sovereignty requirements,” Oracle Corporation Japan CEO and President Toshimitsu Misawa said.

The Asia Pacific region (excluding China) represented just 10% of worldwide data center capacity in Q4 2023. Oracle accounted for 5% of Japan’s cloud services revenue in 2022, Google Cloud took 5% and IBM Cloud and Salesforce followed with 4% each. Market leader Amazon Web Services (AWS) accounted for 26% of revenue and No. 2 Microsoft Azure grabbed 14% market share in 2022, according to a Statista report.

Industry analysts predict that by 2027, more than two-thirds of all organizations adopting generative AI (genAI) will decide which public cloud services to use based on digital sovereignty factors, rendering this issue crucial for cloud service providers looking to keep pace with rival innovators.

Implementing genAI in an enterprise environment, for example, will surface substantial regulatory challenges on the data that resides within large language models (LLMs) and within the applications that use those LLMs, according to Gartner.

As a result, the firm predicts that specialty cloud providers will be considered by most enterprises as they expand their cloud footprint to a wider range of geographies and use cases for genAI.

“Digital sovereignty will drive the need to include cloud providers that can meet the evolving and unique requirements of sovereign operations – no matter the region they operate in,” Gartner VP analyst Sid Nag said.