In Japan's 2018 budget, the total allocation for artificial intelligence (AI) was 77.04 billion yen (approximately 4.6 billion yuan), which is less than 20% of the budgets allocated by the U.S. and China—two countries leading in AI development. This limited funding puts Japan at a disadvantage in the global AI race. If this trend continues, Japan risks falling further behind its competitors.
According to a report from Kyodo News on February 25th, although the Japanese government increased its AI-related budget compared to the previous year, it still lags significantly due to financial constraints. The gap between public and private investment is even more pronounced. While direct comparisons are challenging due to differing statistical methods, data from the Ministry of Education, Culture, Sports, Science and Technology shows that the U.S. government spends over six times more on AI than Japan—around 500 billion yen—while China spends more than five times as much, approximately 450 billion yen.
In the 2018 budget, the Ministry of Economy, Trade and Industry allocated 39.3 billion yen for next-generation AI chip development for robots, while the Ministry of Health, Labour and Welfare invested 19.6 billion yen in medical data utilization and drug development. The Institute of Physical and Chemical Research received 11.5 billion yen for basic research and talent training. Additionally, the Cabinet Office secured a total of 55.5 billion yen for strategic R&D projects, some of which are focused on AI initiatives.
The report emphasized that under tight fiscal conditions, the key to Japan’s future success in AI will be how effectively it can allocate limited resources to high-potential areas and attract private sector investment. Senior officials in the region believe it is difficult for Japan to compete directly with American tech giants in the internet domain, where U.S. companies hold a dominant position. Therefore, Japan's strategy is to focus on improving production efficiency in manufacturing and healthcare through AI innovation.
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