Japan Doesn't Want to Depend on American or Chinese AI. Here's What It's Building Instead

In an AI race currently dominated by companies from the United States, like OpenAI and Anthropic, and China’s Alibaba Group, Japan appears to be laying the groundwork to build and run its own large-scale AI systems locally.

A new report claims that Japanese investment group SoftBank has set up a new company with partners including NEC and Honda Motor to “build a foundation model for ‘physical AI,’ which autonomously controls robots and machines, through a public-private partnership.”

Sony Group, the three megabanks, MUFG Bank, Sumitomo Mitsui Banking Corp., Mizuho Bank, as well as Nippon Steel and Kobe Steel, have reportedly invested in the venture. Tokyo-based AI developer Preferred Networks is also expected to collaborate on building the model.

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A report also claims the Japanese government is considering backing the company. Through a program run by the New Energy and Industrial Technology Development Organisation under the economy ministry, up to ¥1 trillion (about $6.2 billion) is being earmarked over five years to support domestic AI development, and this new company is expected to apply.

The motivation is partly competitive and partly strategic. As AI begins to handle sensitive industrial and operational data, depending on foreign foundation models is starting to look like a risk.