SAKURA Internet: how student web hosting became Japan’s sovereign cloud and AI infrastructure
SAKURA Internet began in 1996 with a student building servers and selling hosting capacity. Three decades later, the same company had become part of Japan’s push to build more of its cloud and artificial-intelligence infrastructure at home.
Founder Kunihiro Tanaka started the business while studying at Maizuru National College of Technology. The first version of SAKURA was practical rather than grand: provide internet users and businesses with reliable server space at a time when commercial hosting in Japan was still developing.
By 2026, SAKURA Internet operated cloud services and domestic data centres, had become the first Japanese provider selected for multiple Government Cloud programmes, and was investing heavily in GPU infrastructure for generative AI.
The company started as a school venture
Tanaka founded SAKURA Internet in December 1996 while he was still a student. The business grew out of hands-on experience building and operating servers rather than a telecom or software-company spin-off.
That origin mattered because Japan’s commercial internet was still young. Companies and individuals needed somewhere to host websites and online services, but running reliable infrastructure themselves was expensive and technically demanding.
SAKURA incorporated as a stock company in August 1999 and opened its first data centre in Osaka two months later. The company was moving from a small hosting operation toward owning the physical infrastructure underneath its services.
Hosting turned into a data-centre business
As internet use expanded, SAKURA moved beyond shared hosting into dedicated servers and larger infrastructure services. Owning data-centre capacity gave the company more control over power, cooling, networking and hardware deployment.
The business listed on the Tokyo Stock Exchange’s Mothers market in October 2005, giving SAKURA more access to capital as demand for online infrastructure increased.
Unlike a pure software company, SAKURA had to invest in buildings, electrical systems, network equipment and servers before customers could use the capacity. That made growth more capital-intensive, but it also created physical assets that could support recurring hosting and cloud revenue for years.
Ishikari changed the scale of SAKURA’s infrastructure
A major step came in November 2011 with the opening of the Ishikari Data Center in Hokkaido. The large suburban site gave SAKURA room to expand outside dense urban locations and became central to the company’s later cloud and AI strategy.
Large data centres are valuable because they can support more servers, higher power density and more efficient cooling than small facilities. They also allow operators to add capacity in stages as demand grows.
Ishikari eventually became the home for much of SAKURA’s high-performance computing investment, including newer GPU services aimed at artificial-intelligence workloads.
SAKURA Cloud moved the company higher up the stack
Traditional hosting gives customers access to server capacity. Cloud computing adds a software layer that lets users create, resize and manage infrastructure more flexibly.
SAKURA Cloud became one of the company’s most important services as Japanese organisations shifted away from buying and maintaining all of their own hardware.
The transition changed the customer relationship. Instead of renting only a fixed server, customers could consume computing, storage and related services as part of a broader cloud platform.
By the 2026 financial year, SAKURA reported ¥15.3 billion in cloud-services revenue, up 9.4% from the previous year.
Government Cloud turned domestic ownership into a strategic advantage
Japan’s government cloud programme created a new opportunity for SAKURA. Public agencies increasingly depend on cloud infrastructure, but governments also care about security, control and the location of critical digital systems.
In November 2023, SAKURA was conditionally selected as a Government Cloud provider, provided that SAKURA Cloud met 305 technical requirements by the end of fiscal 2025.
The company completed that work, and in March 2026 the Digital Agency confirmed SAKURA Cloud as a target Government Cloud service. SAKURA was also selected for the fiscal 2026 programme, making it the first domestic provider chosen for multiple years.
This mattered beyond one contract. It strengthened SAKURA’s position as a Japanese-owned cloud provider at a time when data sovereignty and domestic infrastructure had become national policy questions.
Generative AI created a new infrastructure cycle
The rise of generative AI changed the economics of data centres because large models require enormous amounts of GPU computing power. Ordinary server capacity is not enough for many training and inference workloads.
SAKURA responded by building GPU services under the Koukaryoku brand. The company added NVIDIA H200 infrastructure and later introduced plans based on Blackwell-generation B200 GPUs.
To deploy capacity more quickly, SAKURA also built a container-type data centre at Ishikari. The facility was designed to shorten construction time compared with a conventional building and initially housed roughly 1,000 H200 GPUs.
GPU infrastructure revenue reached ¥8.14 billion in the financial year ended March 2026, up 20.3% year on year.
A ¥3.8 billion AI order showed demand was becoming material
In April 2026, SAKURA announced a large order from a national institution for generative-AI computing infrastructure. The planned contract value was about ¥3.8 billion.
The order included managed high-performance computing clusters using NVIDIA H100 and H200 GPUs, with service provision planned through March 2027.
This was important because it moved the AI strategy beyond infrastructure announcements. A customer had committed meaningful spending to the computing capacity SAKURA had built.
The company still faces the same risk as every infrastructure operator: GPUs are expensive, technology moves quickly and new capacity only produces attractive returns if customers keep it busy.
FY2026 showed how different SAKURA had become
SAKURA’s 2026 results reflected a business no longer dominated by traditional hosting. Cloud services, GPU infrastructure and government projects were all meaningful revenue contributors.
Cloud-services revenue reached ¥15.32 billion, while GPU infrastructure generated ¥8.14 billion. Other services rose strongly as large government projects contributed to the year.
Physical infrastructure services, by contrast, declined as older housing and dedicated-server products became less important.
That mix tells the story of the company more clearly than a generic “hosting provider” label. SAKURA is moving from selling server space toward operating strategic cloud and computing infrastructure.
Domestic infrastructure is now part of the product
For much of SAKURA’s history, customers mainly cared whether hosting was reliable and affordable. In 2026, where the infrastructure is owned and operated has become part of the value proposition.
Government systems, sensitive corporate data and AI workloads have increased interest in sovereign infrastructure. SAKURA benefits because its cloud and data centres are operated domestically in Japan.
The company has also explored confidential-computing technologies that can protect data while it is being processed on GPU infrastructure, another sign that security and sovereignty are becoming inseparable from raw computing performance.
SAKURA’s story moved from websites to national infrastructure
The business Kunihiro Tanaka started as a student was built around a simple need: people wanted reliable servers without having to build the infrastructure themselves.
Shared hosting led to dedicated servers. Data centres led to cloud services. The Ishikari facility created room for much larger infrastructure, and generative AI turned high-density GPU capacity into a new growth market.
The Government Cloud selection completed another part of the transition. SAKURA was no longer only competing for commercial hosting workloads; it had become part of Japan’s attempt to keep more critical digital infrastructure under domestic control.
That is a much bigger role than the company had in 1996, but the underlying business remains familiar: build computing infrastructure, operate it reliably and make it easier for other organisations to use.
