TOKYO -- Japanese real estate developer Mitsui Fudosan will build a data center in an underground tunnel in the city of Kobe in a bid to give new life to unused infrastructure and resolve challenges to constructing data centers above ground.

The facility will be built in the Suma Belt Conveyor, a tunnel originally constructed to transport soil to develop artificial islands, such as the one now home to Kobe Airport. The site was in use from 1964 to 2005. This is believed to be Japan's first commercial-use data center to be built in an underground tunnel.

Mitsui Fudosan will partner with general contractor Kumagai Gumi, which originally built the Suma Belt Conveyor, as well as Tokyo-based data center operator Getworks. The builders will lease about 3 kilometers of the 14.5-km tunnel from Kobe, with the project covering roughly 17,000 square meters.

According to terms of the bid announced by the Kobe municipal government in July, the monthly lease for use of the tunnel was set at a minimum of 600,000 yen ($3,800) for a period of 10 to 20 years.

More than 10 shipping containers housing servers will be placed in the tunnel, at a depth of more than 40 meters. The data center will be able to receive up to 20 megawatts of power.

The facility is expected to be used by companies and research institutions as a location for servers dedicated to generative AI as well as for storage of confidential data.

Mitsui Fudosan is considering adopting the NTT group's Innovative Optical and Wireless Network ( IOWN ) high-speed optical network. Links to data centers in the Tokyo metropolitan area and other regions are also on the table.

The data center is scheduled to launch operations at the end of next year. Going forward, Mitsui Fudosan will develop more underground data centers, focusing primarily on unused railway tunnels, former mines and forest land across Japan.

Underground data centers are considered to have higher resistance to earthquakes than above-ground facilities. They are also less susceptible to physical damage from external factors.

Because underground data centers often use existing infrastructure, costs associated with land acquisition and construction can be minimized, potentially making them less expensive than above-ground facilities of the same scale.

In addition, the temperature inside a tunnel is at 15 to 20 degrees Celsius year-round, which helps reduce the energy required to cool the servers. Mitsui Fudosan is also adopting a cooling system that reuses groundwater to minimize the environmental impact.

With the widespread adoption of generative artificial intelligence, demand for data centers is rapidly growing. At the same time, acquiring land and electricity for the projects is becoming more difficult, particularly in the Tokyo metropolitan area. The projects face opposition from locals concerned about the impact on the landscape and environment.

Underground data centers could offer a new approach for overcoming these headwinds. The facilities may lead to development in rural areas with an abundance of underutilized infrastructure, and could serve as backup facilities in the event of disasters.

In America and Europe, the development of data centers using former military facilities and underground sites is gaining momentum, due to their resilience against natural disasters, high level of security against external threats, and stable temperature and humidity.

In Japan, tunnels built at least 50 years ago account for about 30% of the total, according to government data. The number of tunnels that have become dilapidated and unutilized is expected to increase in the future, opening up potential locations for data centers.