Nvidia’s Strategic Expansion into Japan: A Focus on Physical AI
Nvidia CEO Jensen Huang spent two days – July 15 and 16 – in Tokyo courting Japan’s industrial and chip supply elite, weeks after a keynote speech in Taiwan and months after a visit to South Korea. He left the company with contracts that spanned Japan’s entire technology ecosystem: a national AI factory, partnerships with the country’s leading robotics companies and deals with the chip material suppliers that power Nvidia’s next generation of AI chips. His message was clear. Nvidia is setting its sights on Japan’s factory floors, and many of the country’s biggest manufacturers are joining in. The next chapter of AI, Huang said, involves factory floors, robots and machines, and he wants Japan to build it.
Thirty years ago, a $5 million investment from Sega helped keep the near-bankrupt Nvidia afloat. Today, Nvidia and Japan’s industrial giants need each other again – this time to build the age of physical AI, starting with these three projects:
Noetra: Japan’s Sovereign AI Endeavor
Japan is determined to maintain autonomy over its AI development, particularly in factories and robotics. In response, the government has assembled a coalition of around 44 domestic companies, including SoftBank, Sony, NEC, and Honda, to develop proprietary AI solutions. The initiative, dubbed Noetra, represents a significant investment of up to 1 trillion yen ($6.2 billion) over five years, focusing on ‘physical AI’ — software designed to operate machinery. Nvidia will play a crucial role, providing the hardware backbone with a Vera Rubin AI factory, a massive data center slated for launch in 2028, featuring 13,750 Vera CPUs and 27,500 Rubin GPUs.
Noetra’s development is structured in phases, beginning with a Japanese language-based reasoning model in fiscal year 2026. By 2028, an omnimodal version capable of processing text, images, video, and audio is expected, followed by the rollout of “Real-World Native AI” for robotics operation by 2030.
The Robotics Coalition: Strengthening Japan’s Industrial Backbone
Nvidia’s ambition extends to Japan’s manufacturing sector, with key players such as Fanuc, Yaskawa, Kawasaki Heavy, Fujitsu, Hitachi, NEC, Sony, SoftBank, and Kubota aligning with Nvidia’s Cosmos models. These models, part of an open project launched by Nvidia in May, aim to revolutionize manufacturing processes. Nvidia’s introduction of Cosmos 3 Edge, utilizing Jetson Thor chips, is already prompting companies like Honda R&D and Omron to innovate further.
Huang emphasized the potential of AI in the physical realm, stating, “The next frontier of AI is in the physical world, and this is a unique opportunity for Japan. Japan invented modern manufacturing. Now it has the opportunity to reinvent it for the age of smart industries.”
Toyota: Bridging Automotive Innovation and Physical AI
Toyota, a long-time user of Nvidia’s technology, is expanding its collaboration with the chipmaker. At CES in January 2025, Toyota showcased its next-generation vehicles on Nvidia’s Drive platform. Beyond automotive advancements, Toyota leverages Nvidia’s capabilities in its manufacturing processes, utilizing simulations for production line design and developing software that enhances vehicle performance and traffic management systems.
With these developments, Tokyo’s strategic investment in physical AI is evident. The country aims to deploy 10 million AI-equipped robots across 18 sectors by 2040, backed by a $65 billion investment from both public and private sectors.
Japan’s Vision for Global AI Leadership
Japan’s AI robotics strategy, released in March, targets a 30% share of the global AI robotics market by 2040, a market valued at approximately 20 trillion yen ($133 billion). The Ministry of Economy, Trade, and Industry (METI) is funding the development of domestic foundational models to drive this ambition, with Noetra’s Nvidia-powered infrastructure pivotal to this effort.
Underpinning this industrial push is a drive for sovereignty. Amid global AI advancements, Japan seeks to control its data and computing power independently. Huang’s presence alongside Trade Minister Ryosei Akazawa at the launch of Japan’s physical AI initiative underscores the significance of this strategic direction. The Takaichi administration is prioritizing AI and semiconductors, with a broader growth plan aiming for 370 trillion yen ($2.3 trillion) in investments by 2040.
In two days, Huang sat across from nearly every name that matters in the Japanese tech industry — the CEOs of Toyota, Fanuc, Yaskawa, Fujitsu and Kawasaki over lunch and dozens of supply chain chiefs over skewers and whiskey at a Kanda Izakaya.
It’s the same playbook he followed weeks before – a homecoming keynote in Taiwan, fried chicken and a 50,000 GPU deal in Seoul last fall. This time it was Tokyo’s turn, with the robots, the supply chain and the chips underneath.
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