Steel giants, automakers, and banks plan to build Japan's answer to US and Chinese AI dominance

Softbank is uniting Japan's industrial elite to build the country's own AI foundation, trying to reduce dependence on American and Chinese models.

Eight Japanese corporations, including NEC, Honda, Sony, three major banks, Nippon Steel, and Kobe Steel, have invested in a new Softbank unit. The goal is to develop a foundation model with roughly one trillion parameters by the end of the decade. The project focuses on "Physical AI," meaning artificial intelligence that can autonomously control robots and machinery.

Even large Japanese companies increasingly rely on foundation models from OpenAI, Anthropic, or Alibaba. But as AI handles more sensitive data like the operational status of industrial facilities, concerns about training data flowing to foreign servers are growing, according to Nikkei. All data processing is set to take place on Japanese soil, including at a data center Softbank is building in a former Sharp LCD factory in Sakai, near Osaka.