Japan will invest heavily to become a global power in AI

Japanese Prime Minister Shigeru Ishiba unveiled a $65 billion plan to boost Japan’s chip and artificial intelligence industries through subsidies and other tax incentives.

Under the plan, the government will provide support worth 10 trillion yen (or more) through fiscal 2030 and comes as countries seek to strengthen control over their chip supply chains in the wake of global shocks, including trade tensions between the United States and China.

Presentation

During a press conference on Monday, Prime Minister Ishiba stated that the government would not issue deficit-covering bonds to finance the chip industry support plan. However, he did not reveal details about how the financing would be carried out.

Part of the government’s economic package is expected to be approved by the cabinet on November 22, envisaging a total of 50 trillion yen of public and private sector investment in chips over the next 10 years.

The Prime Minister also mentioned that the government plans to meet with business and union representatives later this month to discuss next year’s annual wage negotiations. Furthermore, no tax increase is planned to finance the plan.

Plan Highlights

One of the main companies that should benefit is Rapidus, as well as other chip suppliers for artificial intelligence. Rapidus, led by industry veterans, aims to mass produce cutting-edge chips on the island of Hokkaido from 2027, in partnership with IBM and Belgian research organization Imec.

The economic impact is expected to total around 160 trillion yen, as indicated in the draft plan. The Japanese government intends to submit the plan to the next parliamentary session.

Source: Reuters.