Japan Didn’t Build the AI Model. But It Might Win Anyway.

Most AI headlines come from Silicon Valley. Who shipped what, which benchmarks got beaten, which tool will rule them all.

That’s not Japan’s story.

And maybe that’s exactly why Japan could quietly dominate the next phase: actually using AI at scale.

Japan didn’t create ChatGPT or Claude. But here’s what it has instead:
1. A real labor shortage, not theoretical job displacement.
Japan had 686,000 births last year which was a historic low. We have 1.4 million IT engineers but need 600,000 to 800,000 more by 2030. With unemployment at just 2.5% and 125 job openings for every 100 job seekers, AI isn’t taking jobs here. It is what many people believe is what is needed to save our economy.

2. An analog-heavy reality begging for change.
Only 7.5% of Japan’s 55,000+ administrative procedures can be completed online. Paper forms are everywhere. Multi-step approvals (and even hanko chops) required for everything. Workflows that haven’t changed in decades. The inefficiencies aren’t hidden. They’re built into the system. And AI is finally powerful enough to cut through them.

3. Surprisingly practical regulation.
The Japanese business culture isn’t paralyzed by AI anxiety. The government just passed the AI Bill in May, that aims at supporting AI research and deployment, and strengthening risk management. The bill avoids imposing strict new rules or penalties on AI developeemphasizing guidance over restriction. They’ve allocated over ¥10 trillion ($65 billion) to AI development. Observers are calling Japan a “machine learning paradise.”


Here’s what makes this fascinating: The race isn’t just about building better models. It’s about who can weave AI into actual work.

Japan’s structural challenges might become its biggest advantage.

If you’re watching this shift or living it, I’d love to know what you’re seeing.