Rakuten’s $100 Million Bet on India: Fueling Global Innovation Through AI and Talent

Rakuten’s $100 Million India Expansion: Strategic Growth Through AI and Innovation


In a significant strategic move underscoring the growing importance of India in the global technology landscape, Japan’s Rakuten Group, Inc. has announced a major investment initiative. The tech conglomerate plans to invest at least $100 million in India in 2025, with a focused commitment to expand its operations, workforce, and artificial intelligence (AI) capabilities. This move not only reflects Rakuten’s confidence in India’s technological ecosystem but also signals the increasing interdependence between global corporations and Indian innovation hubs.


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Rakuten: A Snapshot

Founded in 1997 by Hiroshi Mikitani, Rakuten is a Tokyo-based global innovation leader operating in sectors including e-commerce, fintech, digital content, telecommunications, and AI. Often dubbed as the “Amazon of Japan,” Rakuten has grown into one of the world’s most diversified and technologically forward corporations, boasting over 70 different businesses across multiple continents.

With a robust commitment to technology and data-driven decision-making, Rakuten has been a pioneer in integrating AI, big data, and cloud computing into its services. Its recent profitable fiscal year — ending with a net profit of 10.5 billion yen (approximately $73.6 million) — was largely attributed to this strategic focus, marking a return to profitability after years of high-capital investments, particularly in mobile and AI infrastructure.


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India: A Strategic Powerhouse for Rakuten

India plays a pivotal role in Rakuten’s global strategy. The country serves as a base for its Global Capability Centre (GCC), which supports nearly 50% of its global businesses. Located primarily in Bengaluru, India’s tech capital, the GCC employs thousands of skilled engineers, data scientists, and AI researchers. The decision to invest $100 million more into this ecosystem reflects not just an expansion plan, but a long-term vision for innovation.

Rakuten's Chief Technology Officer, Yasufumi Hirai, emphasized that the investment is not just financial but intellectual. "India is where we find the minds that power the future of our technology," he stated during a recent press briefing. "Our teams here are essential in building the platforms that keep us globally competitive."


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AI at the Heart of the Expansion

A core component of the $100 million investment will be directed toward enhancing AI capabilities. Rakuten has already seen considerable success with tools like SixthSense, an AI-powered predictive issue detection platform used in both its e-commerce and fintech services. SixthSense monitors system behavior and can anticipate issues before they escalate, ensuring seamless customer experience and backend efficiency.

The India-based team was instrumental in building and deploying SixthSense. This success has encouraged Rakuten to further empower its Indian developers and data scientists with resources to scale similar technologies. According to the company, integrating AI into every layer of its operations — from customer service to logistics to sales automation — is crucial for improving efficiency and driving revenue growth.

AI integration has already paid dividends: internal reports suggest a 25% increase in operational efficiency and a 40% reduction in the time required to generate marketing and sales materials using AI-enhanced tools.


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Job Creation and Talent Development

Rakuten's investment also includes plans to expand its workforce in India by 8% in 2025. The focus will be on hiring talent in emerging fields such as machine learning, cybersecurity, robotics, cloud infrastructure, and quantum computing.

This is a promising development for India’s tech professionals, as it opens up opportunities to work on global products with cutting-edge technologies. Moreover, Rakuten has announced plans for partnerships with Indian educational institutions and startup incubators to support skills training, innovation labs, and research initiatives.

"We are not just hiring talent; we are cultivating it," said Sunil Gopinath, CEO of Rakuten India. "Through mentorship, training programs, and collaborative R&D, we aim to make India the AI powerhouse for Rakuten’s global roadmap."


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Why India?

There are several reasons why India stands out as a strategic destination for global tech investment:

1. Talent Pool: India produces over 1.5 million engineering graduates annually, many specializing in AI, data science, and computer engineering. This gives companies like Rakuten access to a scalable and highly educated workforce.


2. Cost Efficiency: Operating in India allows Rakuten to leverage cost advantages without compromising on the quality of output. Indian developers are known for their problem-solving skills and adaptability.


3. Robust Startup Ecosystem: India is home to one of the world’s fastest-growing startup ecosystems, particularly in AI and fintech. Rakuten’s proximity to this ecosystem provides opportunities for partnerships, acquisitions, and innovation sourcing.


4. Government Initiatives: Schemes like Digital India and Startup India have created a conducive regulatory environment for foreign investment in technology and innovation.




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Global Ambitions, Local Execution

Rakuten’s India GCC is involved in some of the company’s most critical innovations. For instance, Rakuten Pay, the company’s digital wallet and online payment platform, was developed with significant input from the Bengaluru teams. Additionally, their work on cybersecurity infrastructure and fraud detection has helped Rakuten maintain a strong reputation for customer trust and data security.

The expansion aims to double down on these efforts, with plans to develop new AI frameworks that will be integrated into Rakuten’s global telecom, banking, and logistics services.


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Challenges and Mitigation

No expansion is without challenges. Rakuten must navigate India’s regulatory complexities, infrastructure gaps in certain regions, and growing competition for skilled talent. Additionally, the ever-evolving AI landscape requires constant upskilling and adaptation.

However, Rakuten has shown a keen understanding of these challenges. It is building strong local leadership, working closely with state governments, and developing hybrid work environments to attract talent from across India — not just metro cities.


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A Broader Trend in Global Tech

Rakuten’s move is part of a broader trend of global tech giants doubling down on their India operations. Companies like Google, Microsoft, Amazon, and Meta have already made similar billion-dollar bets on Indian talent and markets. Rakuten’s focused, AI-driven approach differentiates it as a company that not only wants to serve India but innovate from India for the world.

This development also signals India’s transition from a back-office destination to a front-line innovator in the global technology supply chain.


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Conclusion

Rakuten’s $100 million investment in India is a landmark decision that cements the country’s role as a global innovation engine. With AI at its core, this expansion is poised to create jobs, foster innovation, and contribute meaningfully to the digital transformation of global industries.

For Rakuten, India is not just another market — it is a strategic partner in reshaping how technology can connect, protect, and empower people across the globe.


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