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Japan's METI to Provide 387.3 Billion Yen for Physical AI Effort by SoftBank-Led Noetra and AIST

June 30, 2026 at 05:33 EDT

Policy & Regulation
Foundation Models
Robotics

Japan's Ministry of Economy, Trade and Industry (METI) announced on June 30, 2026 that it will provide 387.3 billion yen in fiscal 2026 to support domestic AI foundation model development, directing the funds to Noetra, a new company led by SoftBank, and the National Institute of Advanced Industrial Science and Technology (AIST). The five-year program runs through fiscal 2030, with total support expected on the order of 1 trillion yen.

June 30, 2026 · METI / NEDO

Japan Bets ¥1 Trillion on "Physical AI" to Close the Gap

METI commits ¥387.3 billion in FY2026 — the first year of a five-year, roughly ¥1-trillion program — to build a domestic foundation model that lets AI operate robots and machines in the real world. The funds go to SoftBank-led startup Noetra and the national institute AIST.

¥387.3B

FY2026 first-year allocation

~¥1T

Total over five years

5 yrs

FY2026 → FY2030

Scale of the commitment

Year-one funding is only the opening installment — the planned program is about 2.6× larger across five years.

¥387.3B

FY2026

~¥1T

5-year total

The Recipients

Noetra — Tokyo-based startup developing the Physical AI foundation model.

Backers: SoftBank · NEC · Sony Group · Honda, and others

AIST — handles advanced technology research and development.

The Target

A multimodal foundation model for Physical AI — autonomously operating robots and machines in the real world.

Handles text · images · audio · sensor data — to be made broadly available to Japanese companies.

Supporters say

A welcome chance to build a domestic model in a field long dominated by foreign products — leveraging Japan's manufacturing strengths to ease labor shortages and lift competitiveness.

Critics ask

Is the large injection of public money justified? Could it become a landing spot for retiring bureaucrats — and will it actually translate into industrial competitiveness?

No specifics yet — announced the same day, the program has no disclosed model name, benchmark, price or delivery format, and no developer feedback. Attention now turns to R&D progress at Noetra and AIST, and whether the funding connects to real industrial applications.

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