Nippon Life to Double U.S. AI Data Center Loans as Japanese Finance Emerges as an 'AI Funding Source'

【Financial News, Tokyo = Correspondent Seo Hye-jin】Nippon Life, Japan's largest life insurer, will increase infrastructure loans focused on U.S. artificial intelligence (AI) data centers to 2 trillion yen (approximately 17.66 trillion won). MUFG Bank will also invest in an AI infrastructure fund worth around 4 trillion yen. Japanese financial institutions are emerging as key sources of funding in the U.S. race for AI dominance.
According to Nihon Keizai Shimbun (Nikkei) on the 20th, Nippon Life will double its infrastructure loan balance, including loans for data centers, from approximately 1 trillion yen at the end of March to 2 trillion yen by 2035. Although it is also considering projects in Japan, its main investment target is the United States, which has more data centers than any other country. The company is already financing the construction of data centers operated by Amazon and others.
The loans use project financing (PF), with principal and interest repaid from data center business revenues. Kei Shibata, head of Nippon Life's Structured Finance Sales Department, said, "U.S. PF offers an average interest margin of more than 2%, making it attractive as an investment and helpful for diversifying assets."
Global consulting firm PricewaterhouseCoopers (PwC) forecast that global data center investment will reach $31.6 trillion in 2050, 38 times the 2026 figure. The AI race is driving up semiconductor and server prices, sharply increasing demand for construction and operating funds.
Japan's major banks expanded their related lending before insurers did. According to the London Stock Exchange Group (LSEG), Japan's three largest banks arranged approximately $80 billion in data center and power infrastructure loans worldwide last year, accounting for 13% of the total.
At the end of last year, MUFG Bank agreed to participate in an infrastructure investment fund affiliated with U.S. asset manager BlackRock. The fund will manage a total of $30 billion (approximately 4.7 trillion yen, or 41.5 trillion won) with Microsoft, NVIDIA and others, while seeking investment opportunities centered on AI data centers.
In Japan, a project is also underway to build one of the country's largest data centers in Akita Prefecture, with an investment of up to 2 trillion yen. The project aims to attract funding from the United Arab Emirates (UAE) sovereign wealth fund and domestic and international financial institutions, with operations scheduled to begin in the early 2030s.
However, local opposition is growing amid concerns over rising electricity costs and water shortages. New York State suspended the construction of new large-scale data centers for one year in July, while Virginia began imposing a tax on electricity consumption.
Nippon Life plans to establish a specialized team in the United States around 2027 to address the risks of construction delays and loan defaults. It plans to expand lending mainly to data centers whose business prospects and risks have been analyzed and that have secured financially sound tenants with sufficient financial capacity.

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