Key facts
- Japan commits up to 1 trillion yen ($6.16 billion) to develop a domestic AI foundation model.
- The initiative involves nine companies, including SoftBank, Honda, NEC, and Sony.
- The focus is on "physical AI," integrating AI with robotics and manufacturing.
- A new company, "Japan AI Foundation Model Development," has been established.
- Government funding will be provided over five years, starting in fiscal year 2026.
Japan is launching a significant national initiative to develop its own artificial intelligence foundation models, committing up to 1 trillion yen (approximately $6.16 billion) over five years. This effort, spearheaded by a consortium of nine major Japanese companies including SoftBank Corp., Honda Motor, NEC, and Sony, aims to bolster the nation's technological capabilities and achieve "technological sovereignty" in the face of intense competition from the U.S. and China.
The newly established company, "Japan AI Foundation Model Development," will focus on creating the country's largest foundation model, projected to have around 1 trillion parameters. A key strategic choice for Japan is to prioritize "physical AI"—artificial intelligence designed to control robots and factory equipment, leveraging the nation's manufacturing strengths. This approach diverges from a direct competition with general-purpose AI models like ChatGPT or Gemini, which are dominated by U.S. and Chinese tech giants.
The government's backing, managed by the New Energy and Industrial Technology Development Organization (NEDO), is structured with annual "stage-gate reviews" to ensure projects meet defined technical benchmarks, drawing lessons from past national technology initiatives. This program, set to begin in fiscal year 2026, also emphasizes energy efficiency, aligning with Japan's broader sustainability goals.
Beyond the core four companies, Nippon Steel, Kobe Steel, and Japan's three megabanks (MUFG, SMBC, Mizuho) are participating as minority shareholders. The prominent AI startup Preferred Networks (PFN) will serve as a development partner. SoftBank and NEC are set to lead the development of the AI "brain," while Honda will apply it to autonomous driving and Sony to gaming and semiconductors. The developed AI is intended to be accessible to Japanese companies broadly, fostering a domestic AI ecosystem.