Microsoft announced a four-year, $10 billion investment package in Japan, part of the U.S. company＊s Asia-wide push to expand in a region hungry for artificial intelligence services.

The world＊s largest software maker will develop AI infrastructure alongside Sakura Internet and telecom operator SoftBank, with the two Japanese entities supplying graphics processing units and other computing resources, according to a statement.

As part of the package, Microsoft, whose Copilot has struggled to keep pace with OpenAI＊s ChatGPT and Google＊s Gemini, will invest in cybersecurity partnerships and train a million AI engineers through 2029.

But the biggest outlay would go to expanding the company＊s cloud computing capacity and building new data centers, President Brad Smith said in an interview with Bloomberg and Japanese broadcaster TBS.

※We don＊t build these things simply on the basis of a hope and a prayer. We build them on the basis of clear demand and demand signal,§ he said, following a meeting with Prime Minister Sanae Takaichi. Acting too slowly would either mean losing market share to competitors or holding Japan behind, he said.

※We obviously have to keep our feet on the ground even as we move fast. And we do that.※?

The Redmond, Washington-based company is battling Amazon.com and Alphabet for dominance in Japan, which is spending billions to develop a robust AI ecosystem and catch up to the U.S. and China. Microsoft＊s commitment in Japan follows similar announcements earlier this week in Singapore and Thailand, as well as a pledge in 2024 to spend about $2.9 billion in Japan over two years.

But U.S. hyperscalers＊ planned outlays of about $650 billion this year alone to build out power-guzzling data centers are coming up against global power constraints, as the war in the Middle East enters its second month. Resource-poor Japan relies on the Middle East for more then 90% of its oil and is already turning to less-efficient coal-fired power plants to make sure it can meet existing energy needs.

Still, Japan＊s government is earmarking about ?1.23 trillion ($7.7 billion) to support cutting-edge chips and AI development this fiscal year. It seeks to use the country＊s leadership in industrial robotics to win a more than 30% global market share in what is called physical AI by 2040.

Microsoft has shifted more focus to selling Copilot, its AI tool for the workplace, instead of offering it for free as part of a software bundle. It＊s combining the separate Copilot teams for consumer and corporate clients in a bid to create a smoother AI service across its offerings.