The "inconvenient truth"
The "inconvenient truth" I am addressing to the Japanese audience through this blog is substantiated by the following data! It clearly demonstrates the alarming degree of misjudgment and incompetence among Japan's top leaders in understanding the current era.
Ranking of Private AI Investments by Country in 2023
The following is a ranking of private sector AI investment amounts by country in 2023 (estimated by Stanford University and reported by Mainichi Shimbun):
Rank Country Investment (USD) Investment (JPY approx.)
1st USA ~$100 billion ~\15.7 trillion
2nd China ~$7.76 billion ~\1.2 trillion
3rd UK ~$3.78 billion ~\590 billion
4th Israel ~$1.71 billion ~\270 billion
5th Germany ~$1.46 billion ~\230 billion
9th S Korea ~$1.39 billion ~\220 billion
9th India ~$1.39 billion ~\220 billion
8th Canada ~$1.36 billion ~\210 billion
9th France ~$1.25 billion ~\200 billion
13th Singapore~$1.14 billion ~\180 billion
14th Sweden ~$1 billion ~\160 billion
??? Japan ~$680 million ~\106.8 billion
Despite having a population of 124 million and a GDP of \591 trillion, Japan's AI investment in 2023 is only 1/147th of the U.S. level and lags significantly behind other major countries. Even smaller countries like Sweden (population: ~11 million, GDP: ~\92.69 trillion) and Singapore (population: ~5.64 million, GDP: ~\69.12 trillion) have surpassed Japan in AI investment.
Challenges and Outlook for Japan
As AI investments are expected to increase further from 2024 onwards, Japan faces numerous challenges to catch up.
Predicted AI Investments in the U.S. by 2025
Major AI companies in the U.S. are expected to make enormous investments by 2025. Below are some confirmed and estimated figures:
Item Investment (USD) Investment (JPY approx.)
Microsoft (six months) ~$80 billion ~\12.6 trillion
Tesla (annual) ~$80 billion ~\12.6 trillion
Other AI companies (15 avg.)~$50 billion each ~\7.85 trillion each
U.S. Total (estimated) ~$750 billion ~\590–1,174 trillion
Even with the minimum estimated investment of $375 billion (~\590 trillion), Japan's AI investment in 2025 could remain thousands to tens of thousands of times smaller when considering investment amounts, data volume, talent pool, and speed of development.
The Risks of Falling Behind
AI is set to revolutionize not only industries like automotive and manufacturing but also fields like healthcare, education, energy, and finance. Its impact is enormous and immeasurable.
If Japan fatally lags in this trend, the nation could face an exploding "digital deficit," with the current deficit of \6 trillion potentially multiplying several times (e.g., \20 trillion or more). Moreover, the continued depreciation of the yen could exacerbate Japan's energy deficit (\26 trillion) and food deficit (~\9 trillion).
Consequently, Japan may fall into a current account deficit, leading to a downgrade of Japanese government bonds from single-A to BBB or even BB (non-investment grade). This could accelerate the relocation of major Japanese companies' headquarters abroad, hollowing out the domestic economy and plunging Japan into severe economic stagnation. The nation risks becoming a country of elderly people and unemployed citizens.
What Can We Do?
To change this situation, we must first acknowledge this harsh reality and brace ourselves for severe pain (e.g., an unemployment rate ten times the current level). Replacing incompetent leaders and embracing technologies that shape the future are the only paths forward, albeit painful ones.
The opportunity to build a better society is slim and fleeting. However, now is the time to act.
85 to 90 years ago, Japan's difficult situation gave rise to populism, which then led the country in the wrong direction toward militaristic politics (expansionism). The Japanese people must not forget this lesson from history.
For the Future: What We Can Do Now
Having understood the current state, what actions should we take? Gathering information, learning, and taking action are crucial. Even small steps taken collectively can lead to significant change.
The future is still in our hands. Your actions can be the first step. Let’s think and act together for a better tomorrow!