Japan Accelerates Its AI Strategy as Robotics Giants Join NVIDIA in the Race for Physical AI

By Wan Ge in Tokyo

Artificial intelligence has recently become almost synonymous with the global arms race in large language models. This week, however, Japan unveiled a textbook-style combination of corporate and government initiatives, signalling that it is pursuing a different path—one more closely aligned with its own industrial strengths: physical AI.

On July 16, Fujitsu announced that it had begun exploring business cooperation with three major Japanese robotics companies—FANUC, Yaskawa Electric and Kawasaki Heavy Industries—as well as US chipmaker NVIDIA. The partnership aims to build a coordinated control platform that connects the digital and physical worlds while maintaining a degree of technological “sovereignty,” accelerating the practical deployment of AI in manufacturing, logistics, healthcare and other real-world environments.

Under the proposed division of responsibilities, Fujitsu will work with FANUC on manufacturing applications, with Yaskawa Electric on retail and distribution, and with Kawasaki Heavy Industries on healthcare. Fujitsu plans to test the platform’s ability to control industrial robots at one of its own factories by the end of September and intends to make it available to robotics manufacturers before the end of the year. NVIDIA Chief Executive Jensen Huang said that “the next industrial revolution will also be born in Japan.”

This is not an isolated corporate initiative, but part of a broader response extending from the government down through industry. In March, Japan’s Ministry of Economy, Trade and Industry identified physical AI as a key priority in the revision of its semiconductor and digital-industry strategy. The revised strategy is expected to be finalised this summer, marking the first time that the combination of robotics and AI has been formally established as a national policy priority.

Under the government’s framework for strengthening the foundations of the AI and semiconductor industries, Japan plans to invest more than ¥10 trillion in public funding by fiscal 2030. The objective is to stimulate ¥50 trillion in combined public- and private-sector investment over a decade and generate an estimated economic impact of approximately ¥160 trillion.

In April, the ministry also selected nine prefectures, including Hokkaido, Akita, Miyagi, Tochigi and Ibaraki, as candidate locations for “GX Strategic Regions” designed to attract concentrations of data centres. Final designations are expected to be announced this summer, providing additional infrastructure capacity in preparation for the rapid growth of AI-related computing demand.

Overseas capital is also increasing its exposure to Japan. On July 1, SoftBank Group completed the second US$10 billion instalment of its additional investment in OpenAI. OpenAI has also introduced a Japan Cybersecurity Action Plan, initially offering the security capabilities of its latest models to the financial sector, underscoring its continued commitment to the Japanese market.

For years, discussions of Japan’s position in artificial intelligence have tended to focus on its slow start. The country possesses a deep manufacturing base but has produced relatively few new narratives capable of leading the global AI industry, leaving it overshadowed by the highly visible achievements of US large-model companies.

The concentrated series of developments this week, however, suggests that Japan is seeking to play to its strengths while avoiding a direct confrontation with Silicon Valley over computing power and model size. Instead, it is drawing on its internationally recognised capabilities in precision manufacturing and robotics, applying AI to specific environments such as factories, logistics facilities and healthcare settings, where its practical value can be tested.

Industry observers note that an abundant supply of real-world application scenarios is one of the scarcest resources in the commercialisation of artificial intelligence—and precisely where Japanese manufacturing has a longstanding advantage.

From the cooperation between Japan’s leading robotics companies and NVIDIA, to policy support from the Ministry of Economy, Trade and Industry, and the continued involvement of SoftBank, OpenAI and other international sources of capital and technology, Japan is attempting to build a complete industrial runway connecting AI research and development directly with factory-floor deployment.

Whether this runway can ultimately produce a globally competitive “Japanese model” of physical AI will still need to be tested by time and the market.