🏛️ Kagawa Prefecture—famous for its udon noodles and Seto Inland Sea views—just became the first local government in Japan to sign a partnership agreement with NVIDIA, one of the world's largest semiconductor companies. With a population under one million, how did this small prefecture on the island of Shikoku land a deal with a $3 trillion tech giant? The answer lies in an ambitious strategy to fight rural decline with artificial intelligence.

A Historic First: Kagawa × NVIDIA Partnership

In February 2026, Kagawa Prefecture signed a comprehensive partnership agreement with NVIDIA's Japanese subsidiary. At the signing ceremony held at the prefectural office on February 17, Governor Toyohito Ikeda and Masataka Osaki—NVIDIA's Japan representative and a corporate vice president—signed the agreement, marking the first time any local government in Japan has entered into such a partnership with the AI chip giant.

The partnership focuses on three key pillars: attracting companies that utilize NVIDIA's GPUs to establish operations in Kagawa, promoting AI adoption among the prefecture's existing businesses, and collaborating on AI and IT talent development and technical consulting.

This agreement is part of Kagawa's "Setouchi Business Attraction 100 Plan," a long-term strategy launched in 2024 that looks five to ten years ahead, prioritizing the recruitment of large-scale data centers and IT companies to the region.

The AI Foundation Was Already in Place

The NVIDIA partnership didn't come out of nowhere. Kagawa had been quietly building its AI infrastructure for over a year.

In December 2024, "HiReso Kagawa"—a subsidiary of HiReso Inc., the first company in Japan recognized as an NVIDIA Elite Partner—opened the Shikoku and Chugoku region's first GPU-dedicated data center for AI development in Takamatsu City. The facility houses 408 units of NVIDIA's latest "HGX H200" GPU servers.

A second GPU data center opened on March 3, 2026 in the town of Ayagawa, repurposing the former Ayakami Junior High School, which closed in March 2022. It houses NVIDIA GPUs such as the "A4000" and "H100," while part of the school building has been converted into a community space for programming classes and local use.

The total investment is approximately $130 million, with Japan's Ministry of Economy, Trade and Industry (METI) certifying the project under its "Critical Material Supply Security Plan." The project will receive about $50 million in subsidies through NEDO (New Energy and Industrial Technology Development Organization). This is a rare case where national economic security policy directly intersects with regional industrial development.

Kagawa's Secret Weapon: An AI Professor from Udon Country

Kagawa's AI strategy has another powerful asset: Professor Yutaka Matsuo of the University of Tokyo, one of Japan's foremost AI researchers.

Professor Matsuo happens to be a native of Sakaide City in Kagawa Prefecture. The prefectural government appointed him as "Industrial AI Advisor," leveraging his expertise to provide guidance to AI companies operating in the region and facilitate connections through his extensive research network. Companies making significant AI contributions are certified as "Matsuo Industrial AI Advisor Certified Kagawa AI Promotion Companies."

When HiReso received its certification as the first such company, NVIDIA Japan's business division head also attended the ceremony as a guest—evidence that the personal networks underlying the current NVIDIA partnership had been carefully cultivated.

Understanding "Sovereign AI"

The broader context for Kagawa's initiative is the global trend toward "Sovereign AI"—a strategy where nations and regions maintain control over their own AI infrastructure and data to ensure industrial competitiveness and economic security.

In late 2025, the Japanese government formulated a roughly $6.5 billion "Sovereign AI" promotion plan. Over five years, the program aims to develop domestically produced AI foundation models and strengthen the semiconductor supply chain. A consortium of approximately ten companies, including SoftBank and Preferred Networks, will lead the development of large-scale AI models optimized for the Japanese language.

Kagawa's approach can be seen as a "regional version" of this national strategy. The idea of local governments proactively owning AI computing resources and making them available to regional industries represents a shift from merely "using" AI to "creating" AI locally.

AI as a Lifeline for Rural Japan

Behind Kagawa's embrace of AI lies a crisis shared by rural communities across Japan.

Population decline driven by an aging society and low birth rates is accelerating nationwide, with young people continuing to migrate to major cities. Kagawa's economy has traditionally depended on labor-intensive industries like agriculture, manufacturing, and shipbuilding, but workforce shortages are becoming increasingly severe.

Kagawa's strategy is straightforward: "It is impossible to solve labor shortages through hiring alone. AI-driven productivity transformation is the answer." Simultaneously, by establishing AI industries in the region, the prefecture hopes to create career opportunities that keep young people local. HiReso's data center operations in Shika Town, Ishikawa Prefecture, demonstrated that new tech facilities can address a common complaint among rural job seekers: "There are no jobs I actually want to do."

Japan's AI Infrastructure Boom

Kagawa's initiative is part of a massive wave of AI infrastructure investment sweeping across Japan.

Microsoft is investing $2.9 billion in Japan between 2024 and 2026, building AI infrastructure and training 3 million people in AI skills. AWS has committed $15.2 billion through 2027. SoftBank plans to invest over $40 billion through its "Stargate" project with OpenAI.

While much of this investment has concentrated in Tokyo and Osaka, rising power and land costs combined with disaster risk diversification are driving rapid data center expansion into regional areas. In Okuma Town, Fukushima Prefecture, an AI data center supports recovery from the 2011 earthquake and tsunami. In Genkai Town, Saga Prefecture, another closed school is being converted into a GPU data center.

Kagawa was among the first to capitalize on this trend, successfully attracting the world's most powerful AI partner.

From Udon Prefecture to AI Prefecture: Challenges Ahead

Challenges remain, of course. Data centers consume enormous amounts of electricity. Whether rural power infrastructure can sustain AI industry growth and how to balance this with renewable energy goals are pressing questions.

Building facilities alone won't revitalize rural areas. Securing the skilled talent needed to run data centers, providing support until local businesses can meaningfully adopt AI, and creating mechanisms for residents to feel the tangible benefits of the AI industry are all critical tests.

Still, the fact that a prefecture of under one million people has secured a partnership with a global semiconductor powerhouse sends a powerful message to local governments across Japan—and potentially around the world.

In Japan, local governments are increasingly turning to AI to combat population decline and drive economic growth. How is your country approaching AI strategy at the regional or local level? Are there examples of smaller cities or rural areas using technology to revitalize their economies? We'd love to hear your perspective.

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