Evidencing Japan’s appeal as a platform for high-tech startups are recent moves there by two US firms known for nurturing seed- and pre-seed–stage ventures. Alchemist Accelerator, a San Francisco–based accelerator focused on developing seed-stage ventures, launched an equity-based program in Tokyo in 2024. Its Japan program is its first and thus far only foothold in Asia. Techstars, a global startup accelerator and venture capital firm based in New York, also set up shop in Tokyo in 2024. Its sector-agnostic Japan program initially accommodates 12 startups, including 6 based in Japan.

Two of the numerous AI companies based outside Japan that have set up operations there are the German robotics leader KUKA and the French energy-management pioneer METRON. Both are generating benefits with AI that include solutions for characteristically Japanese concerns: KUKA’s labor-saving assistance for Japan’s shrinking workforce and METRON’s energy-saving assistance for Japan’s ambitious decarbonization effort.

“Robotics technology has evolved through advances in articulated arms, visual sensing, and data processing,” observes KUKA Japan CEO Hironori Ishimaru. “I anticipate that AI will drive a dramatic new leap in the technology by helping to make robots responsive to spoken instructions. When that will happen is subject to lots of variables, but we could well see some exciting breakthroughs in voice responsiveness by 2030.”

Ishimaru suggests that AI will also contribute to raising capacity utilization rates and to reducing waste. “It will help anticipate problems,” he explains, “and allow manufacturers to avoid work stoppages through preventive maintenance. Along with improving operational efficiency, that will reduce the material waste that results from equipment failures.”

KUKA, as an industry leader, serves customers in a vast range of sectors. Ishimaru acknowledges, however, that robot saturation is high in such Japanese industries as automobiles. He confides that he is looking carefully at sectors, such as food processing, where companies retain abundant potential for automating operations further. Ishimaru adds that Japanese customers are more receptive than ever to product offerings from non-Japanese suppliers. “The wall is still there,” he comments, “but it is coming down.”

“AI increases our computing power, increases options for our customers,” explains Kevin Lesaulnier, the general manager at METRON Japan and METRON’s head of sales for North Asia. “We create a customized algorithm for each site, each factory, each building. Two factories might each be producing the same thing, but the equipment is different, the geography is different. And we accommodate the different parameters with our algorithms. Energy consumption is influenced by numerous parameters, and the challenge of processing all the variables transcends human capacity. AI helps us, helps our clients identify optimal energy consumption levels by taking into account a vast number of datasets.”

“Japanese companies, Japanese industry present needs for help with raising energy efficiency and reducing carbon output,” stresses Lesaulnier. “We help with software for energy management and optimization that customers integrate into their systems. The software meshes with the customers’ systems, including industrial equipment, IoT devices, energy meters, and operational software. It gathers data in real time from those sources and, using AI, analyzes the data to identify inefficiencies, anomalies, and avenues for improvements.”

The Ministry of Economy, Trade and Industry has launched the Generative AI Accelerator Challenge (GENIAC) to raise the level of platform model development capability in Japan. This initiative includes providing computational resources, supporting demonstrations for the utilization of data and generative AI, organizing matching events with user companies, and facilitating collaboration with global tech companies.

To ensure regulation while promoting innovation, the ministry will continuously update the "AI Guidelines for Business," developed in collaboration with the Ministry of Internal Affairs and Communications, considering usage trends and technological advancements. Additionally, The AI Safety Institute (AISI) will serve as a hub for internationally discussed methods of AI safety assessment. The Ministry of Economy, Trade and Industry will collaborate with the Cabinet Office and other organizations to support AISI's activities.

The Japanese market is receptive to AI solutions on offer from companies of any nationality that address Japanese needs. Witness the successful examples of KUKA and METRON. Thus is Japan’s burgeoning AI sector becoming home to an increasingly global cast of participants. The Japan External Trade Organization (JETRO) has achieved a virtuous cycle of international innovation creation by promoting investment in Japan, collaboration between foreign and Japanese companies, globalization of startups, and participation of highly skilled foreign professionals.