Large Japanese telecom companies have the capital and business headroom to support the rapid growth in data center markets, S&P Global Ratings said in a Thursday release.

The significant expansion of the data center segment was due to rising demand amid progress in artificial intelligence (AI) and cloud computing, S&P analyst Shinichi Endo said.

The rating agency expects the country's telecom corporations to maintain their edge locally and abroad amid the broadening data center market.

However, the companies will have to retain financial discipline to anchor upfront expenditures in data centers, S&P said.

The data center business will also have a minimal impact on the companies' earnings given their still-small profit share, the rating agency said.