Japan Generative Artificial Intelligence

AI is being harnessed across a wide range of industries, including smart cities, big enterprises, healthcare, manufacturing, finance, entertainment, and transportation, profoundly reshaping the way we live and work.

Japan’s AI market is experiencing rapid growth, with increasing demand for AI technologies across various industries. Moving into 2024 and beyond, the Japanese AI market is expected to evolve future, particularly in sectors such as smart cities, healthcare, manufacturing, and finance, where AI adoption is set to expand significantly.

IDC reported that the Japanese AI systems market reached to approximately $ 4.5 billion, with a year-on year growth rate of 35.5%. The AI systems market growth is attributed that broad range of companies have embarked on digital transformation (DX), and has started increasingly utilized AI, a part of the de facto technologies.  Japan’s Ministry of Internal Affairs and Communications (MIC) predicts that Japan’s AI systems market will grow to approximately $ 7.3 billion by 2027.

With regards to the key areas of AI application, Smart Cities, Healthcare, Manufacturing and Finance are key industries. Japan has actively developed AI-powered smart cities to enhance urban efficiency. AI is playing a crucial role in Japan’s healthcare sector, particularly in diagnostic support systems and patient management. Japanese manufacturing industries are leveraging AI for quality control and predictive maintenance. These applications are expected to boost production efficiency and reduce costs. In the financial sector, AI is utilized for risk management and fraud detection, with a strong emphasis on Fin Tech applications.

The continuous market growth in the Japanese market is expected and there are numerous business opportunities for U.S. firms, on the other hand, competition in Japan’s AI market is intensifying in the software domain. For U.S. companies, there are opportunities to offer AI solutions tailored to the Japanese market to enter through partnerships with local Japanese firms because numerous Japanese IT firms are keen to collaborate with U.S. IT firms having advanced and cutting-edge technologies to broaden AI utilization in Japan.

For more information, please contact US Commercial Service Japan at Office.Tokyo@trade.gov.