Japan Consolidates "AI Nation" Strategy: Plans Annual 1 Trillion Yen Investment to Boost Chip and AI Industries

This Thursday, a Japanese parliamentarian revealed that the ruling Liberal Democratic Party (LDP) plans to maintain and consolidate its support for the artificial intelligence industry, allocating approximately 1 trillion yen (about RMB 46.303 billion) annually in the future to support Japan's domestic chip and AI industries.

According to Yoshihiro Seki, secretary-general of an LDP lawmakers' group, the majority of the funds will be implemented through the regular annual budget starting from next April, rather than through a supplementary budget for the current fiscal year.

Japan formulated a new strategy to revitalize domestic chip manufacturing as early as 2021. According to Japan's Ministry of Economy, Trade and Industry (METI), since 2021, the Japanese government has allocated a cumulative total of approximately 5.7 trillion yen (about RMB 263.928 billion) to support Japan's semiconductor and AI industries, but most of these funds came from extra budgets rather than regular budgets.

"Because we were uncertain at the time whether this approach would succeed, we have been advancing the work relying solely on extra budgets," Seki said. "But from now on, METI's share in the regular budget will increase significantly. Therefore, our idea is that allocations from supplementary budgets will decrease, enabling more stable operations."

In last year's supplementary budget, approximately 1.5 trillion yen was earmarked specifically for supporting domestic semiconductor and AI projects. This was the first round of funding under the commitment of over 10 trillion yen in new public funds promised by former Prime Minister Shigeru Ishiba to support various fields. Seki stated that the 1 trillion yen the LDP plans to seek will also become part of this 10 trillion yen commitment.

Of all previously designated allocations by the Japanese government, approximately 1.7 trillion yen has been allocated to the domestic chip company Rapidus Corp. Established in 2022 with backing from eight major Japanese companies including SoftBank, Sony, and Toyota, the company plans to mass-produce cutting-edge chips by 2027.