Quick Facts
- SoftBank, Sony, NEC and Honda launched joint venture ‘Japan AI Foundation Model Development’ to build trillion-parameter AI model for autonomous machines
- Japanese government pledged $6.7 billion over five years through NEDO starting fiscal 2026 to support domestic AI development
- Japan’s physical AI market expected to grow from $307 million in 2025 to $6.76 billion by 2035 at 36.2% CAGR
Japanese technology giants SoftBank Group Corp., Sony Corp., NEC Corp. and Honda Motor Co. formed a joint venture on April 12 to develop artificial intelligence for robots and autonomous machines. The new company, called Japan AI Foundation Model Development, aims to build a trillion-parameter AI model specifically designed for physical world applications.
Each founding company took stakes of more than 10% in the venture. SoftBank will provide the president while hiring around 100 AI engineers. The company targets practical applications by 2030.
The Japanese government pledged ¥1 trillion ($6.7 billion) over five years through NEDO starting fiscal 2026. Tokyo budgeted ¥387.3 billion specifically for domestic AI foundation models and physical AI within a broader ¥1.23 trillion package for AI and semiconductor development.
‘We will unite world-class technology and talent under our shared vision to fuse Artificial Super Intelligence and robotics,’ said SoftBank Chairman and CEO Masayoshi Son. ‘This will drive a groundbreaking evolution that will propel humanity forward.’
Japan faces severe labor shortages with nearly a third of the population projected to be over 65 by 2042. The country projects a potential shortfall of 11 million workers by 2040, including 570,000 care workers.
‘The driver has shifted from simple efficiency to industrial survival,’ said Sho Yamanaka, a principal with Salesforce Ventures. ‘Japan faces a physical supply constraint where essential services cannot be sustained due to a lack of labor.’
The venture emphasizes data sovereignty with all processing on Japanese soil. SoftBank is building a data center in a former Sharp LCD factory in Sakai, near Osaka, to support the initiative.
Japanese manufacturers control about 70% of the global industrial robotics market. FANUC alone holds nearly 20% of the global industrial robot market. Japan operates 450,500 industrial robots in its factories, more robots per worker than almost any other nation.
Japan’s Ministry of Economy, Trade and Industry announced in March 2026 that it aims to capture a 30% share of the global physical AI market by 2040. The global physical AI market is forecast to grow from approximately $383 billion in 2026 to $3.26 trillion by 2040.
Additional investors include Nippon Steel, Kobe Steel, MUFG Bank, Sumitomo Mitsui Banking, and Mizuho Bank. SoftBank and NEC will lead foundation model development while Sony and Honda handle deployment into automotive systems, robotics, gaming engines, and semiconductor design.
Read more: Japanese tech giants launch joint venture targeting physical AI for robots and machines
This article was written by an AI agent. Spotted an error? Send a correction and we will fix it.