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Home ➤ Information and Communications Technology ➤ Artificial Intelligence ➤ Japan Generative AI Market
Japan Generative AI Market
Japan Generative AI Market
Published date: May 2024 • Formats:
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  • Home ➤ Information and Communications Technology ➤ Artificial Intelligence ➤ Japan Generative AI Market

Japan Generative AI Market By Component (Software, Services), By Technology (Generative Adversarial Networks (GANs), Transformers, Variational auto-encoders, Diffusion Networks), By End-use (Media & Entertainment, BFSI, IT & Telecommunication, Healthcare, Automotive & Transportation, Gaming, Others), By Application (Computer Vision, NLP, Robotics and Automation, Content Generation, Chatbots and Intelligent Virtual Assistants, Predictive Analytics, Others), By Model (Large Language models, Image & Video generative models, Multi-modal generative models, Others), Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

  • Published date: May 2024
  • Report ID: 120084
  • Number of Pages: 223
  • Format:
  • Overview
  • Table of Contents
  • Major Market Players
  • Request a Free Sample
  • Quick Navigation

    • Report Overview
    • Key Takeaways
    • Component Analysis
    • Technology Analysis
    • End-use Analysis
    • Application Analysis
    • Model Outlook Analysis
    • Key Market Segments
    • Driver
    • Restraint
    • Opportunity
    • Challenge
    • Growth Factors
    • Emerging Trends
    • Key Players Analysis
    • Recent Developments
    • Report Scope

    Report Overview

    The Japan Generative AI Market size is expected to be worth around USD 22,995 Million By 2033, from USD 918 Million in 2023, growing at a CAGR of 38% during the forecast period from 2024 to 2033.

    The Generative AI market in Japan is witnessing significant growth, driven by technological advancements and increased investment in artificial intelligence. Key growth factors include the rapid development of machine learning algorithms, a strong emphasis on innovation, and support from the Japanese government for AI research and development. Additionally, the growing adoption of AI across various industries, such as healthcare, finance, and automotive, is propelling market expansion.

    The market faces several challenges. High development costs, a shortage of skilled AI professionals, and concerns about data privacy and security are significant obstacles. Companies must navigate these issues to harness the full potential of generative AI technologies. The increasing demand for AI solutions in various sectors creates a fertile ground for innovation.

    Startups can focus on niche applications, such as natural language processing or computer vision, to differentiate themselves. Collaborations with established companies and leveraging government support programs can also provide strategic advantages. Overall, with careful planning and strategic investment, new players can thrive in this dynamic and evolving market.

    Japan Generative AI Market

    Furthermore, the increasing availability of high-performance computing resources and cloud-based platforms has made generative AI more accessible to businesses and individuals. Cloud-based services provide scalable and cost-effective infrastructure for deploying generative AI models, democratizing access to these technologies.

    Japan has the highest geriatric population ratio in the world, with 29.1% of its people over 65 years old, according to statistics by Nippon. In 2022, there were 36.27 million people over the age of 65. This demographic trend is accelerating the demand for AI solutions, particularly in healthcare and eldercare sectors, where generative AI can improve service delivery and efficiency.

    The World Economic Forum’s Future of Jobs Report 2023 highlights another critical factor driving the generative AI market: only 35% of Japan’s companies prioritize workers over 55. This lack of focus on older workers creates a gap that generative AI can help fill, through automation and enhanced productivity solutions.

    Key Takeaways

    • The Japan generative AI market has exhibited substantial growth, with a market size estimated at USD 917.2 million in 2023 and a projected compound annual growth rate (CAGR) of 37.5% from 2024 to 2030.
    • In 2023, the Software segment held a dominant position in Japan’s Generative AI market, capturing more than a 64.5% share.
    • In 2023, the Transformers segment held a dominant market position in Japan’s Generative AI technology landscape, capturing a substantial share.
    • In 2023, the Media & Entertainment segment held a dominant market position in Japan’s Generative AI market, capturing a significant share.
    • In 2023, the Natural Language Processing (NLP) segment held a dominant market position in Japan’s Generative AI market, capturing a substantial share.
    • In 2023, the Large Language Models segment held a dominant market position in Japan’s Generative AI market, capturing a significant share.

    Component Analysis

    In 2023, the Software segment held a dominant position in Japan’s Generative AI market, capturing more than a 64.5% share. This segment’s leadership is primarily attributed to the extensive deployment of AI-powered software solutions across various industries, including finance, healthcare, and automotive, which are keen to leverage AI for enhanced efficiency and innovation.

    The substantial investment in AI software tools that facilitate machine learning, natural language processing, and image generation contributes to this segment’s growth. These tools are crucial for businesses aiming to stay competitive by automating processes and generating creative solutions. Moreover, the proliferation of startup ecosystems and robust R&D activities in Japan have significantly driven the software segment.

    These startups often focus on developing cutting-edge generative AI applications that cater to the unique needs of local and global markets, thus propelling the demand for advanced AI software. Additionally, government initiatives aimed at fostering innovation in AI technologies have supported the growth of this sector by providing funding and regulatory support, making it easier for companies to innovate and scale their AI solutions.

    The dominance of the Software segment is also bolstered by the increasing integration of AI in consumer applications. From personalized content recommendations in entertainment platforms to AI-driven predictive text in smartphones, Japanese consumers are increasingly interacting with generative AI functionalities, driving demand for more sophisticated AI software. This trend is expected to continue, with software solutions leading the way due to their pivotal role in enabling generative AI capabilities across various platforms and industries.

    Technology Analysis

    In 2023, the Transformers segment held a dominant market position in Japan’s Generative AI technology landscape, capturing a substantial share. This prominence is largely due to the versatility and efficacy of Transformer models in handling diverse tasks such as natural language understanding, translation, and content generation.

    The ability of Transformers to manage sequential data makes them exceptionally suitable for applications requiring deep contextual understanding, which is pivotal in sectors like customer service, e-commerce, and content creation. The leadership of the Transformers segment is further underscored by significant advancements in model training techniques and the growing availability of large datasets. These developments have enhanced the models’ efficiency and accessibility, encouraging widespread adoption across both large corporations and SMEs in Japan.

    Moreover, the surge in collaborative projects and partnerships between academic institutions and tech giants to innovate and refine Transformer technologies has propelled their adoption. Initiatives focusing on reducing the computational cost and improving the environmental sustainability of these models have also made them more appealing to a broader market.

    Furthermore, the integration of Transformer models into popular platforms used by millions daily has accelerated their dominance. For instance, the use of Transformers in chatbots and virtual assistants to provide more human-like and contextually relevant interactions showcases their practical benefits, driving their adoption in customer-facing applications. As these technologies continue to evolve, their applications are expected to expand, further cementing the Transformers’ leading position in Japan’s Generative AI market.

    End-use Analysis

    In 2023, the Media & Entertainment segment held a dominant market position in Japan’s Generative AI market, capturing a significant share. This segment’s leadership is driven by the increasing demand for personalized content, sophisticated visual effects, and automated content creation. Generative AI technologies, particularly in areas like scriptwriting, game development, and digital advertising, are revolutionizing how content is produced and consumed.

    These technologies allow for the creation of highly engaging, customized content that can adapt to viewer preferences in real-time, thereby enhancing user engagement and satisfaction. The ascendancy of the Media & Entertainment segment is also supported by the rapid adoption of AI-driven tools for animation and visual effects.

    These tools significantly reduce the time and cost associated with producing high-quality visual content, making them invaluable in a highly competitive industry. Furthermore, generative AI is increasingly being employed in the music industry for composing music, generating lyrics, and even creating new sounds, which has expanded the market’s reach and appeal.

    Moreover, the integration of AI in media production and distribution processes has facilitated the generation of new revenue streams and business models, such as dynamic ad insertion and AI-curated streaming services. This has not only increased profitability but also spurred further investments into AI technologies within the sector. As these technologies continue to advance, their influence on the media and entertainment industry is expected to grow, further reinforcing this segment’s market dominance.

    Application Analysis

    In 2023, the Natural Language Processing (NLP) segment held a dominant market position in Japan’s Generative AI market, capturing a substantial share. This segment’s significant growth can be attributed to the widespread adoption of NLP technologies across various sectors, including customer service, healthcare, finance, and legal services, where the ability to understand and generate human-like text is paramount.

    NLP technologies are increasingly used to automate customer interactions, enhance user experiences, and provide personalized communication, such as through chatbots and intelligent virtual assistants. The leadership of the NLP segment is further bolstered by advancements in machine learning models that have dramatically improved the accuracy and efficiency of language understanding and generation.

    The development of sophisticated algorithms that can analyze context, understand sentiment, and generate coherent and contextually appropriate responses has led to broader adoption. Moreover, the rising need for data-driven decision-making and the automation of routine tasks in the corporate sector have fueled the demand for NLP solutions, making it a key driver of market growth.

    Additionally, the integration of NLP with other technologies like voice recognition and AI-driven analytics has expanded its applications. For instance, voice-activated assistants and AI-powered analytics platforms utilize NLP to interpret spoken language and extract insights from unstructured data, respectively. These integrations have not only enhanced the functionality of NLP technologies but also increased their attractiveness to businesses looking to harness the full potential of AI. As NLP continues to evolve and integrate with other AI domains, its market dominance in Japan is expected to strengthen further.

    Model Outlook Analysis

    In 2023, the Large Language Models segment held a dominant market position in Japan’s Generative AI market, capturing a significant share. This leading status stems from the broad application of these models in enhancing communication, content creation, and decision-making processes across multiple industries.

    Large Language Models are particularly valued for their ability to understand and generate human-like text, making them indispensable in sectors such as media, customer service, and education. These models are integral to developing sophisticated chatbots, intelligent virtual assistants, and advanced content generation systems that require a deep understanding of language and context.

    The prominence of the Large Language Models segment is further reinforced by continuous advancements in model architecture and training techniques. These improvements have significantly enhanced the accuracy, efficiency, and responsiveness of these models, making them more capable of handling complex language tasks and more accessible to a wider range of users. For example, advancements in transfer learning and fine-tuning processes have allowed businesses to tailor generic models to suit specific industry needs, boosting both the adaptability and attractiveness of these models.

    Moreover, the increasing investment in AI research and the integration of AI into educational curricula have propelled the growth of the Large Language Models segment. These investments have facilitated better understanding and utilization of these models, particularly in creative and academic settings, where they are used to generate educational content and assist in research activities. As AI continues to penetrate various facets of life and business in Japan, the influence and market share of Large Language Models are expected to grow, solidifying their position as a cornerstone of the generative AI landscape.

    Japan Generative AI Market Share

    Key Market Segments

    Component

    • Software
    • Services

    Technology

    • Generative Adversarial Networks (GANs)
    • Transformers
    • Variational auto-encoders
    • Diffusion Networks

    End-use

    • Media & Entertainment
    • BFSI
    • IT & Telecommunication
    • Healthcare
    • Automotive & Transportation
    • Gaming
    • Others

    Application

    • Computer Vision
    • NLP
    • Robotics and Automation
    • Content Generation
    • Chatbots and Intelligent Virtual Assistants
    • Predictive Analytics
    • Others

    Model Outlook

    • Large Language models
    • Image & Video generative models
    • Multi-modal generative models
    • Others

    Driver

    Government Support and Strategic Initiatives

    A key driver propelling the growth of the Japan generative AI market is the robust support and strategic initiatives from the government. Japan has prioritized AI research and development as part of its national economic growth strategy, with funding programs, partnerships with industry and academia, and regulatory frameworks promoting innovation. This government backing creates a conducive environment for investment and innovation in generative AI, stimulating market growth and fostering technological advancement across industries.

    Restraint

     Data Privacy and Security Concerns

    One significant restraint facing the Japan generative AI market is the growing concern over data privacy and security. As generative AI relies on vast amounts of data to train models and generate content, ensuring the privacy and security of this data becomes paramount. With increasing regulations and public awareness surrounding data protection, companies must navigate stringent compliance requirements and implement robust security measures to mitigate risks associated with data breaches and unauthorized access, which could impede market growth.

    Opportunity

    Expansion of Multimodal Generative Models

    An opportunity for the Japan generative AI market lies in the expansion of multimodal generative models. These models, capable of integrating insights from multiple data modalities, offer enhanced accuracy and resilience, driving innovation within the domain. With applications spanning various industries, such as image and video generation, personalized content creation, and predictive analytics, the adoption of multimodal generative models presents lucrative opportunities for companies to capitalize on diverse use cases and cater to evolving market demands, thereby fueling market growth and differentiation.

    Challenge

    Talent Shortage and Skills Gap

    A significant challenge confronting the Japan generative AI market is the shortage of talent and the widening skills gap. As demand for AI expertise continues to surge, companies face difficulties in recruiting and retaining skilled professionals with specialized knowledge in generative AI technologies.

    The scarcity of talent inhibits innovation and hampers market growth, as companies struggle to harness the full potential of generative AI to drive business outcomes. Addressing this challenge requires concerted efforts from academia, industry, and government to develop talent pipelines, provide training programs, and foster a skilled workforce capable of driving innovation and sustaining market growth.

    Growth Factors

    • Government Support and Funding: Robust government support and funding initiatives aimed at promoting AI research and development contribute significantly to the growth of the Japan generative AI market. Financial incentives, partnerships with industry and academia, and regulatory frameworks that facilitate innovation create a favorable environment for market expansion.
    • Increasing Demand for Automation: The rising demand for automation across various industries, driven by labor shortages and the need to enhance productivity, fuels the adoption of generative AI technologies. Automation of repetitive tasks through generative AI enables companies to streamline operations, improve efficiency, and drive cost savings.
    • Technological Advancements: Ongoing advancements in AI technologies, particularly in deep learning and neural networks, enhance the intelligence and capabilities of generative AI models. Improved algorithms and computational resources enable more sophisticated generative models capable of generating high-quality content across diverse domains.
    • Expanding Applications: The expanding applications of generative AI across industries such as healthcare, manufacturing, entertainment, and gaming drive market growth. From personalized content generation to medical image synthesis and drug discovery, generative AI offers innovative solutions to address complex challenges and drive business outcomes.
    • Collaborations and Partnerships: Collaborations between industry, academia, and research institutions accelerate innovation and technology transfer, fostering a vibrant ecosystem for generative AI development. Strategic partnerships facilitate knowledge exchange, talent development, and the commercialization of innovative applications, driving market growth and differentiation.

    Emerging Trends

    • Multimodal Generative Models: The emergence of multimodal generative models, capable of integrating insights from multiple data modalities, represents a significant trend in the Japan generative AI market. These models offer enhanced accuracy and resilience, enabling diverse applications across industries such as image and video generation, personalized content creation, and predictive analytics.
    • Cloud-Based Services: Increasing adoption of cloud-based generative AI services enables scalability, flexibility, and cost-effectiveness for businesses. Cloud-based solutions offer companies the ability to access advanced AI capabilities without significant upfront investments in infrastructure, driving market growth and accessibility.
    • Focus on Data Privacy and Ethics: Growing awareness of data privacy and ethical considerations surrounding AI technologies prompts companies to prioritize responsible AI development and deployment. Ensuring transparency, fairness, and accountability in AI systems becomes crucial, leading to emerging trends in ethical AI frameworks and governance practices.
    • Real-Time Applications: The demand for real-time applications of generative AI, such as real-time content generation, recommendation systems, and interactive experiences, drives innovation in the market. Companies leverage generative AI technologies to deliver dynamic and engaging user experiences, enhancing customer engagement and satisfaction.
    • Edge Computing: The adoption of edge computing in generative AI enables processing and inference tasks to be performed closer to the data source, reducing latency and improving efficiency. Edge AI solutions facilitate real-time decision-making and enable applications in resource-constrained environments, driving the adoption of generative AI in diverse use cases.

    Key Players Analysis

    In the rapidly expanding Generative AI sector in Japan, several key players are distinguishing themselves by pioneering innovations and expanding the technological landscape. Among these, Preferred Networks stands out with its significant contributions to deep learning and neural network technologies, which have applications ranging from robotics to healthcare. Abeja, another notable entity, leverages AI for retail analytics and supply chain enhancements, helping businesses optimize operations through data-driven insights.

    Cinnamon operates in the AI field by focusing on automating office tasks, thereby increasing productivity by reducing time on routine processes. Ubie, specializing in healthcare, uses AI to improve diagnostic accuracy and patient outcomes, highlighting the sector’s potential in supporting critical medical tasks. Ascent Robotics is known for its work in AI-driven solutions for autonomous vehicles, addressing some of the complex challenges in mobility and transport.

    Top Key Players in the Market

    • Preferred Networks
    • Abeja
    • Cinnamon
    • Ubie
    • Ascent Robotics
    • LeapMind
    • Stockmark
    • Studio Ousia
    • Heroz
    • Autify

    Recent Developments

    • In November 2023, Seven-Eleven Japan, a leading convenience store chain, adopted generative artificial intelligence (AI) to improve its product planning processes. This innovative approach marks a significant step in the retail industry, demonstrating the potential for AI to optimize retail operations beyond traditional sales functions.
    • In April 2023, Mitsui and NVIDIA collaborated to launch a supercomputer named Tokyo-1 to support Japan’s $100 billion pharmaceutical industry. This initiative incorporates 16 NVIDIA DGX H100 AI systems, which are essential components of NVIDIA’s NGX enterprise AI platform. These systems are designed to develop advanced AI models and create high-resolution molecular dynamics, significantly accelerating the drug discovery process.
    • In August 2023, Google introduced its generative AI Search feature in Japan and India. This feature includes support for local languages, voice input, text and visual prompts, and a user-friendly interface, enhancing the search experience for users in these regions.

    Report Scope

    Report Features Description
    Market Value (2023) USD 918 Mn
    Forecast Revenue (2033) USD 22,995 Mn
    CAGR (2024-2033) 38%
    Base Year for Estimation 2023
    Historic Period 2019-2022
    Forecast Period 2024-2033
    Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments
    Segments Covered By Component (Software, Services), By Technology (Generative Adversarial Networks (GANs), Transformers, Variational auto-encoders, Diffusion Networks), By End-use (Media & Entertainment, BFSI, IT & Telecommunication, Healthcare, Automotive & Transportation, Gaming, Others), By Application (Computer Vision, NLP, Robotics and Automation, Content Generation, Chatbots and Intelligent Virtual Assistants, Predictive Analytics, Others), By Model (Large Language models, Image & Video generative models, Multi-modal generative models, Others)
    Regional Analysis North America – US, Canada; Europe – Germany, France, The UK, Spain, Italy, Russia, Netherlands, Rest of Europe; Asia Pacific – China, Japan, South Korea, India, New Zealand, Singapore, Thailand, Vietnam, Rest of APAC; Latin America – Brazil, Mexico, Rest of Latin America; Middle East & Africa – South Africa, Saudi Arabia, UAE, Rest of MEA
    Competitive Landscape Preferred Networks, Abeja, Cinnamon, Ubie, Ascent Robotics, LeapMind, Stockmark, Studio Ousia, Heroz, Autify
    Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements.
    Purchase Options We have three license to opt for: Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF)

    Frequently Asked Questions (FAQ)

    What is the current size and growth forecast for the Japan Generative AI Market?

    The Japan Generative AI Market size is expected to be worth around USD 22,995 Million By 2033, from USD 918 Million in 2023, growing at a CAGR of 38% during the forecast period from 2024 to 2033.

    Which components dominate the Japan Generative AI Market?

    In 2023, the Software segment held a dominant position in Japan’s Generative AI market, capturing more than a 64.5% share.

    What are the main technological advancements driving this market?

    Transformers, which excel in handling sequential data and capturing complex patterns, are the leading technology in the market. These models are crucial for applications in natural language processing, image generation, and more

    Which industries are the primary adopters of generative AI in Japan?

    Media and entertainment lead in adopting generative AI, driven by the need for scalable and efficient content production. Other significant sectors include BFSI, healthcare, IT & telecommunications, and automotive

    Who are the key players in Japan generative AI market?

    Preferred Networks, Abeja, Cinnamon, Ubie, Ascent Robotics, LeapMind, Stockmark, Studio Ousia, Heroz, Autify

    What are the factors driving the Japan generative AI market?

    The factors driving the Japan generative AI market include increasing digital transformation initiatives, adoption of AI across various industries, advancements in AI technologies such as transformers and large language models, and significant investments by key players like SoftBank in developing advanced AI infrastructure.

    Japan Generative AI Market
    Japan Generative AI Market
    Published date: May 2024
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    • Preferred Networks
    • Abeja
    • Cinnamon
    • Ubie
    • Ascent Robotics
    • LeapMind
    • Stockmark
    • Studio Ousia
    • Heroz
    • Autify
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