Japan Tech Stocks Soar on $65 Billion AI Investment Report

Japanese technology stocks rallied on Monday following reports of a major government-backed artificial intelligence investment plan.

According to Nikkei, Japan is considering mobilizing around 10.5 trillion yen, or $65.1 billion, in public and private investment by 2040. The funding would support the development of so-called “physical AI” technologies.

Chip Stocks Lead Japan’s Technology Rally

Shares of major semiconductor and technology companies outperformed the broader Japanese market. Investors expect the proposed initiative to increase long-term demand for AI infrastructure, advanced chips and manufacturing equipment.

Renesas Electronics shares surged 6%, making the chipmaker one of the session’s strongest performers. Meanwhile, Rohm gained nearly 4%.

Advantest, which produces semiconductor testing equipment, rose around 2%. Tokyo Electron, a major supplier of wafer fabrication equipment, climbed 3%.

SoftBank and Sony Shares Move Higher

Other major Japanese technology companies also benefited from the positive market sentiment.

SoftBank Group, a prominent investor in artificial intelligence startups, gained 2%. Sony shares advanced 1.7% during the session.

The broad rally reflected growing investor optimism over Japan’s long-term ambitions in artificial intelligence and semiconductor manufacturing.

Japan Targets AI, Semiconductors and Robotics

The reported physical AI investment plan forms part of Prime Minister Sanae Takaichi’s wider economic growth strategy.

The government is expected to prioritize several strategically important industries, including artificial intelligence, semiconductors and robotics.

Physical AI generally refers to artificial intelligence systems that interact with the real world through technologies such as robots, autonomous machines and smart manufacturing equipment.

Wider Investment Plan Could Reach $2.3 Trillion

According to Nikkei, the physical AI initiative would be included in a larger public-private investment roadmap covering Japan’s most important strategic industries.

The broader plan aims to mobilize as much as 370 trillion yen, equivalent to approximately $2.3 trillion, across 17 sectors by 2040.

Artificial intelligence, semiconductor production and space development are expected to be among the main areas targeted by the strategy.