Takaichi cabinet's 'Building a Strong Japan' plan targets 3,500 trillion won in investment across 17 growth sectors by 2040, with physical AI as the centerpiece and 190 trillion won earmarked to counter the rise of K-content

The Takaichi cabinet plans to deploy at least 370 trillion yen (about 3,500 trillion won, or approximately $2.3 trillion) in combined public and private investment across 17 strategic growth sectors by 2040 as part of its "Building a Strong Japan" initiative. [AFP-Yonhap]
The Takaichi cabinet plans to deploy at least 370 trillion yen (about 3,500 trillion won, or approximately $2.3 trillion) in combined public and private investment across 17 strategic growth sectors by 2040 as part of its "Building a Strong Japan" initiative. [AFP-Yonhap]

As South Korea sets its sights on becoming the world's top physical AI power by 2030 under its "AI Master Plan (2026–2028)," Japan has unveiled a rival investment drive worth roughly 100 trillion won in the same field. Tokyo is also pouring close to 190 trillion won into nurturing "J-content" to counter the global surge of K-content.

Local Japanese media reported Friday that the cabinet of Prime Minister Sanae Takaichi has set a target of mobilizing at least 370 trillion yen (about 3,500 trillion won) in combined public and private investment by 2040 across 17 strategic growth sectors — the centerpiece of its "Building a Strong Japan" policy agenda — according to Yonhap News Agency.

The 17-sector investment drive is the flagship economic policy of the Takaichi administration, which has championed what it calls "responsible and proactive fiscal policy." The plan envisions the government committing public funds to seed private investment and sharpen the international competitiveness of key industries.

The 17 sectors span 62 products and technologies, including physical AI, semiconductors, drones, shipbuilding — encompassing liquefied natural gas carriers — defense, quantum technology, aerospace, content, digital and cybersecurity, nuclear fusion, information and communications technology, and maritime industries.

Physical AI — the application of AI in real-world physical settings such as robots and industrial machinery — stands out as the priority. Japan plans to invest 10.5 trillion yen (about 99.6 trillion won) in the sector by 2040, positioning it as the country's next-generation growth engine.

The goal is to deploy physical AI across a wide range of fields, including factory automation, unmanned transport and infrastructure inspection, and to replace human labor in manufacturing, construction and logistics — sectors struggling with workforce shortages driven by the country's low birth rate and aging population — with AI and robots.

Japan will also invest 29 trillion yen (about 275 trillion won) across three communications infrastructure areas — next-generation wireless, optical communications and undersea cables — to build the high-speed networks and satellite optical links essential to the broader spread of AI.

The government also pledged to accelerate public and private investment in strategic resource development including rare earths, drone development and production, nuclear fusion power, cloud computing and battery storage.

In addition, Japan will launch a large-scale government support program aimed at lifting overseas sales of its content industry — anime, film and beyond — to 20 trillion yen (about 189.7 trillion won) a year by 2033, a figure that would rival the country's annual automobile exports.

The government decided to manage funding for the 17 strategic growth sectors separately from other expenditures.

A new budget framework will be created to give private companies greater predictability for medium- and long-term investment decisions, free from annual budget constraints, while keeping spending within a range that allows the ratio of national debt to gross domestic product to decline steadily.


killpass@heraldcorp.com