Life insurance major, Nippon Life will invest JPY2tn ($12.7bn) in various US AI infrastructure construction projects, reported the Nihon Keizai Shimbun.
The funding will take the form of project finance, in which revenue generated by the project itself serves as the source of repayment. The life insurer plans to invest in domestic data centres this year, and is currently focused on the US which hosts more data centres than any other country in the world.
Nippon Life finds investments in US project finance attractive as it delivers a spread of more than two percentage points on average above the cost of raising the funds, and it also helps diversify its investment portfolio. Until now, large Japanese banks have been investing in domestic data and looking at investment opportunities tied to AI data centres worldwide.
According to consulting firm PwC, global data centre investment will expand to $31.6tn by 2050, or 38 times the 2026 level.