# Takaichi’s $640 billion AI gamble faces reality check in a struggling city > Source: > Published: 2026-09-02 01:25:00+00:00 In Kitakami, a sleepy city deep in the countryside 500 kilometers north of Tokyo, Japan’s AI revolution is unfolding more as a slow burn than a boom. On a humid Friday evening in July, the city’s downtown hummed with activity as tech workers from Kioxia Holdings’ nearby chipmaking plant let off steam in bars and karaoke clubs. A few streets over, taxis crawled along the gravel of a road that’s being repaved to improve access to the factory after it opened a new production facility last year. For Kitakami’s residents, these are welcome signs of progress in a city that, like much of rural Japan, has been grappling with depopulation and economic stagnation for decades. A steady inflow of Kioxia employees has helped stall its demographic decline, and Kitakami now boasts one of the youngest populations of any municipality in Iwate prefecture.