#SoftBank Is Building Its Own Battery Factories to Power Its AI Data Centers — This Changes the Energy Economics of AI Forever
Copy page
TL;DR (Direct Answer): On May 11, 2026, Japanese telecom and tech giant SoftBank Corp. announced a massive ¥100 billion ($636 million) initiative to manufacture its own industrial-scale batteries. The company is converting a sprawling former Sharp LCD factory in Sakai City, Osaka, into a dual-purpose hub: the "AX Factory" for AI data center operations, and the "GX Factory" to mass-produce advanced Battery Energy Storage Systems (BESS). Partnering with South Korean firms COSMOS LAB and DeltaX, SoftBank aims to achieve gigawatt-hour-scale production by 2028. Driven by the staggering electricity demands of AI training and inference, SoftBank is vertically integrating. Instead of relying entirely on strained national grids or foreign battery suppliers, they are building the massive energy reserves required to power their own AI infrastructure, fundamentally changing the economics of the global compute race.
#The Sakai Megaproject: From Screens to Storage
To understand the scale of SoftBank's ambition, look at the real estate.
In 2025, SoftBank acquired a massive 440,000-square-meter facility in Sakai City that previously belonged to Sharp Corporation. Originally built to mass-produce LCD television screens, the site is now being transformed into the physical heart of Japan's AI revolution.
SoftBank is dividing the massive footprint into two distinct, highly symbiotic operations:
- The AX Factory: A massive AI data center and hardware operations hub designed to provide "neocloud" services and specialized infrastructure for AI model training across Japan.
- The GX Factory: A gigawatt-hour-scale manufacturing hub dedicated to producing next-generation battery cells and solar panels.
By building the battery factory on the exact same site as the data center it is meant to power, SoftBank is achieving an unprecedented level of vertical integration, slashing deployment timelines and transmission losses.
#The Chemistry: Moving Beyond Lithium
The most fascinating aspect of SoftBank's announcement is what they are actually putting inside these batteries. They are actively pivoting away from the industry-standard lithium-ion chemistry.
Lithium-ion batteries are excellent, but they are expensive, prone to thermal runaway (fires), and their supply chains are heavily monopolized by China. To bypass these issues, SoftBank has partnered with two South Korean innovators:
- COSMOS LAB: SoftBank is utilizing Cosmos Lab's proprietary zinc-halogen technology. These batteries use pure water as their electrolyte rather than highly flammable organic solvents. They are entirely non-flammable, making them incredibly safe to stack in massive, high-density server farms where heat management is already a critical failure point.
- DeltaX: SoftBank is leveraging DeltaX's "Cell to Pack" technology to build containerized storage systems (BESS) that achieve world-class energy density, maximizing the raw power that can be squeezed into a standard 20-foot shipping container.
#Vertical Integration as a Hedge
Why is a telecommunications and investment company suddenly building batteries? Because electricity is the new silicon.
As we've seen with recent grid crises in Europe and the U.S., the AI industry is hitting a physical energy wall. AI accelerators draw massive amounts of power, and national grids simply cannot handle the load spikes. If a data center's power drops for even a fraction of a second, an entire multi-million-dollar AI training run can be corrupted.
By manufacturing its own massive, fast-discharge storage systems, SoftBank is creating a massive "buffer." These batteries can charge during off-peak hours using cheap renewable energy, and discharge massive amounts of power directly to the AI servers during peak grid stress. It completely insulates SoftBank from grid instability and volatile energy pricing.
#The Geopolitics of Power
Beyond internal use, SoftBank intends to turn this into a massive revenue generator, targeting over ¥100 billion in annual battery revenue by 2030. Once its own AI data centers are satisfied, SoftBank plans to sell these storage systems back to the Japanese grid, industrial factories, and eventually global markets.
Crucially, this move allows Japan to onshore its critical supply chain. Because the zinc-halogen chemistry relies on abundant materials that can be procured locally, SoftBank is eliminating the geopolitical risk of relying on rare-earth minerals and cobalt from regions facing high export-control friction. In the AI era, owning your own power supply isn't just an economic advantage; it is a matter of national security.
#Capability Stack: SoftBank's Energy Strategy
| Metric / Strategy | SoftBank Battery Initiative Details |
|---|---|
| Manufacturing Hub | GX Factory (Sakai City, Osaka) |
| Target Production Scale | Gigawatt-hour (GWh) scale by FY2028 |
| Battery Chemistry | Non-flammable Zinc-Halogen (Water-based electrolyte) |
| Technology Partners | COSMOS LAB (Cell design) & DeltaX (BESS integration) |
| Revenue Target | >¥100 Billion ($636 Million) annually by 2030 |
| Primary Use Case | Powering internal AI Data Centers, followed by grid/industrial sales |
#FAQ
Are these batteries going to be in smartphones?
No. SoftBank is specifically focused on BESS (Battery Energy Storage Systems). These are massive, industrial-scale batteries—often the size of shipping containers—designed to power data centers, stabilize power grids, and support heavy industrial applications, not consumer electronics.
Why is non-flammable chemistry so important for data centers?
AI data centers generate massive amounts of ambient heat due to the thousands of GPUs running constantly. If traditional lithium-ion batteries overheat, they can trigger a chain reaction called "thermal runaway," resulting in catastrophic, difficult-to-extinguish fires. A water-based, non-flammable battery eliminates this catastrophic risk entirely.
Does SoftBank Group (Masayoshi Son) own this new battery company?
The initiative is being spearheaded by SoftBank Corp., which is the domestic telecommunications and IT unit. SoftBank Group (the massive global investment holding company led by Masayoshi Son) owns roughly 40% of SoftBank Corp. However, the move perfectly aligns with Son's broader vision of dominating the global AI infrastructure layer.
Will this solve Japan's power grid issues?
It is a massive step in the right direction. Japan has struggled to expand renewable energy because its grid often lacks the storage capacity to capture solar and wind energy when it's generated. By mass-producing grid-scale batteries domestically, SoftBank could theoretically unlock massive amounts of dormant renewable energy potential across the country.