Japan Commits to Government-led AI Transformation Under New National Plan

Prime Minister Takaichi approved Japan's second AI Basic Plan on July 10, prioritizing vertical AI and robotics with concentrated investment in industrial competitiveness, labor solutions, and defense.

TOKYO — Prime Minister Takaichi on July 10 approved Japan’s second AI Basic Plan, committing the government to what she called “Japan AX” — an AI-driven transformation of administration, industry, and daily life beginning with the public sector itself.

The plan channels public and private investment into vertical AI (domain-specific applications) and physical AI (robotics) across three priority areas: industrial competitiveness and structural reform; labor-shortage relief through automation; and strategic domains including defense and cyber. Funding will draw from the “Strong and Prosperous Japan Investment Framework,” though no budget figures were disclosed. Ministers Onoda and Akazawa will lead sector-specific strategy development and coordinate domestic robotics infrastructure, including a planned global AI robotics hub.

The government will overhaul regulations to accelerate deployment, strengthen the AI Safety Institute (AISI) to evaluate high-performance systems, and revisit the AI Act itself. Takaichi also instructed officials to prepare for Japan to host an AI Summit, timing unspecified.

Why it matters: Japan is shifting from policy aspiration to directed state investment in applied AI, taking an industrial policy approach that mirrors China’s vertical integration model. The emphasis on physical AI and robotics lets Japan build on its manufacturing base, but success hinges on execution details and budget allocations still to come.