INSTITUTION PROFILE / AI & MACHINE LEARNING
Ministry of Economy, Trade and Industry (METI)
Japan's industrial-policy ministry, working on AI through budgets and guidelines
METI handles the industry side of Japan's AI policy. Its main tools are support for domestically developed foundation models and computing resources, very large AI and semiconductor budgets, and the AI Guidelines for Business, which it writes jointly with the Ministry of Internal Affairs and Communications (MIC). The command post for Japan's AI law, however, is not METI but the AI Strategy Headquarters set up within the Cabinet, and the Guidelines are non-binding soft law. This profile looks at how much influence METI really has over AI, in terms of the kinds of power it holds and how far they reach.
- METI in 30 seconds
- What kind of body it is: the four types of influence
- What it does for AI and machine learning
- How far its influence reaches (powers and geography)
- Organisations it works with
- Outlook
- Glossary, references and claim-to-source audit
1. METI in 30 seconds
On AI, METI is both a funder and a provider of guidance, but it is not the command post for AI legislation. The AI Act places the AI Strategy Headquarters in the Cabinet, makes the Prime Minister its head, and has the Cabinet Office handle its administrative work Sourced. METI's biggest lever is money: the FY2026 initial budget set aside a total of ¥1.239 trillion for AI and semiconductors Sourced, a source of funds for industrial policy that sits outside the AI Act. The AI Guidelines for Business describe themselves as "non-binding soft law" Sourced.
2. What kind of body it is: the four types of influence
Unlike the companies in this series, the institutions that appear in AI coverage build neither AI models nor chips. What separates them is the route by which they influence the industry, and that gives four types. METI straddles the Funding type and the Policy and regulation type. In AI, though, what it "sets" is limited to guidelines (non-binding) and industrial policy; the command post for AI law is the Cabinet.
3. What it does for AI and machine learning
METI's work on AI falls into four strands: the AI Guidelines for Business, support for domestic AI development (GENIAC and foundation models), very large AI and semiconductor budgets, and work around safety evaluation and power infrastructure Sourced.
| Initiative | When | What it is (primary source) | Type of tool |
|---|---|---|---|
| AI Guidelines for Business (joint with MIC) | Ver. 1.0 April 2024 / Ver. 1.1 28 March 2025 / Ver. 1.2 31 March 2026 | Aimed at everyone developing, providing or using AI in business activity, including government bodies and local authorities. Sets out basic principles, common guidelines and AI governance. The document calls itself "non-binding soft law" and takes a risk-based approach. Ver. 1.2 reflects the Hiroshima AI Process international guidance | Guidelines (not binding) |
| GENIAC | Started 2 February 2024 | Led by METI and NEDO. Subsidises the cost of the computing resources needed to develop foundation models (in the February 2024 supplementary call, two-thirds for small and medium-sized enterprises and one-half for large companies). Selected 10 projects in round 1, 20 in round 2 and 24 in round 3. In 2026 it has widened to domain-specific models, robot foundation models, data and prize contests. Its official site shows over 90 selected developers, over 300 participating companies and organisations, and over 1,600 community participants | Subsidy (through NEDO) |
| Multimodal foundation model development project (FRONTia) | NEDO call 24 March 2026 / project period FY2026 to FY2030 | Develops a domestic multimodal foundation model as a base for AI robotics and physical AI. After selection, contracts cover only FY2026 and FY2027, and whether to continue is decided each year by a stage-gate review | Commissioned R&D (through NEDO) |
| AI and Semiconductor Industrial Base Strengthening Framework | Set in the November 2024 economic package | METI says it will provide over ¥10 trillion in public support over the seven years to FY2030, to draw over ¥50 trillion in public and private investment over ten years. The FY2026 initial budget totals ¥1.239 trillion (FY2025: ¥332.8 billion) for next-generation semiconductor R&D, AI foundation model development and more. It includes ¥150.0 billion as equity investment in IPA for next-generation semiconductor businesses | Budget and equity |
| AI Safety Institute (AISI) | Launched 14 February 2024 | Its secretariat sits in IPA. It works on research and criteria for safety evaluation, ways of carrying out evaluations, and links with counterpart bodies abroad. METI takes part as one of the ministries and agencies involved | Involvement through an implementing agency (IPA) |
| Watt-Bit Collaboration | Council from March 2025 / Compilation 1.0 on 12 June 2025 | MIC and METI set up a public-private forum on linking electricity and telecommunications for data centre build-out, and published Compilation 1.0 | Public-private forum (co-hosted with MIC) |
Figures are as each primary source states them; this article does not add or convert them. The "over 90 selected developers" and similar counts are display values on the official GENIAC site (checked 15 October 2026), and we have not checked the date or counting rules behind them.
The legal picture: who runs the AI Act
| Item | Content (primary source) | Relation to METI |
|---|---|---|
| Act on the Promotion of Research and Development, and Utilization of Artificial Intelligence-Related Technologies (Act No. 53 of 2025; the "AI Act") | Promulgated and partly in force on 4 June 2025; fully in force on 1 September. Sets the duties of the state, local governments, research institutions and businesses that use AI, and creates a basic plan and the AI Strategy Headquarters. Businesses that use AI must cooperate with national measures (Article 7). The state investigates and then gives guidance, advice and information (Article 16). The main body of the Act contains no penalty provisions (our check) | Not the command post. The Headquarters sits in the Cabinet, headed by the Prime Minister, and its members are all other ministers of state apart from the Prime Minister, the Chief Cabinet Secretary and the AI minister (Articles 22 to 24). The Minister of Economy, Trade and Industry is therefore one of its members (our reading) |
| AI Basic Plan | Cabinet decisions on 23 December 2025 and, as the second-phase plan, on 14 July 2026. The Headquarters drafts it (Article 18) | The Headquarters is the author. METI is one of the bodies carrying out the measures |
| Guidelines on ensuring appropriateness (Article 13 of the Act) | Decided by the Headquarters on 19 December 2025. Encourages voluntary, proactive efforts by all parties | A separate document from METI's AI Guidelines for Business. The Cabinet Office lists the AI Guidelines for Business in its table of ministries' AI guidelines |
| Act on the Promotion of Information Processing (Chapter 6) | From FY2025 to FY2030, bonds (advanced semiconductor and AI-related technology bonds) can be issued through the Energy Special Account to fund measures the Minister of Economy, Trade and Industry takes to promote advanced semiconductors and AI. Up to ¥2.2 trillion can be transferred from the Fiscal Investment and Loan Program Special Account to a dedicated account | A funding mechanism over which METI has direct authority. It rests on this Act, not the AI Act |
The Cabinet Office puts the government-wide AI-related budget at about ¥502.7 billion in the FY2026 initial budget, and the FY2027 budget request at ¥2.9392 trillion plus items requested without a stated amount (26 items) Sourced. METI's own FY2026 "AI and semiconductor" figure is ¥1.239 trillion, and METI's items include semiconductor support Sourced. The two use different definitions of what counts, so they cannot be added or subtracted (the difference in definitions is not checked here). The FY2027 numbers are also budget requests, not enacted budgets. Examples of requests by METI include about ¥896.4 billion for developing multimodal foundation models and about ¥133.3 billion to create a core centre for AI robotics, but these are requested amounts Not yet confirmed.
METI sets three conditions for support under the AI and Semiconductor Industrial Base Strengthening Framework: (1) a strategy to compete globally that strengthens the competitiveness of Japanese industry, (2) goods or technologies that are chokepoints in supply chains and important for economic security, and (3) investment that private companies alone could not make at the necessary scale without a medium- to long-term fiscal commitment from the state Sourced. For a materials supplier, the second is the best clue to whether your material might qualify. But which materials are covered depends on the requirements of each call and project, so these three conditions alone cannot tell you whether a specific material would be selected.
4. How far its influence reaches (powers and geography)
| Aspect | What METI has | What it does not have |
|---|---|---|
| Legal force | Authorship (jointly with MIC) of the AI Guidelines for Business, which the document defines as non-binding soft law. A bond-funding mechanism for AI and semiconductors under the Act on the Promotion of Information Processing | Power to issue orders or impose penalties under the AI Act (the command post is the AI Strategy Headquarters, and we saw no penalty provisions in its main body). Power to sanction businesses that ignore the guidelines |
| Money | ¥1.239 trillion for AI and semiconductors in the FY2026 initial budget, subsidies for GENIAC computing, foundation model projects, and equity investment through IPA. Delivered through bodies such as NEDO and IPA | The final say over the overall AI budget (the Diet votes the budget, and the Cabinet Office coordinates across government). Power to make the FY2027 requests happen |
| Safety evaluation | Supervision of IPA (the Minister of Economy, Trade and Industry is IPA's competent minister, Article 59 of the Act on the Promotion of Information Processing). One of the ministries involved in AISI | Power to decide AISI's activities alone (a liaison council led by the Cabinet Office covers AISI). Safety certification of AI models |
| Geography | Japan. Domestic recipients of funds (such as GENIAC grantees) and readers of Japan's AI governance guidance | Direct power over foreign companies or other countries' policy. We found no statement applying the AI Guidelines for Business to foreign operators |
| Scale | Authorised headcount of 8,068 (expected, end of FY2026). General account of ¥375.4 billion and Energy Special Account of ¥2.533 trillion (FY2026 initial budget) | A total for AI-only spending could not be derived from the published documents (the AI and semiconductor figure includes semiconductors) |
The AI Guidelines for Business are a joint document of MIC and METI, setting out how businesses that develop, provide or use AI can act voluntarily. The document says it chose a goal-based approach built on non-binding soft law, because rule-based regulation with detailed obligations could stifle innovation Sourced. The legal framework for AI is the AI Act, run by the Cabinet's AI Strategy Headquarters, and the main body of that Act has no penalties either. Whether any law directly restricts how AI is used in Japan has to be checked separately under sector-specific laws (personal data, copyright and so on), which this article does not cover.
5. Organisations it works with
METI's AI policy reaches Japanese businesses within the Cabinet's framework and through two implementing agencies, NEDO and IPA. Fig. 2 shows only relationships documented in primary sources.
Organisations named in official materials (selection)
| Organisation | Relationship to METI (primary source) | Link to this series |
|---|---|---|
| Cabinet Office (AI Strategy Headquarters) | Handles the administrative work of the AI Act. Drafts the basic plan and coordinates the measures of ministries | The command post of Japan's AI policy |
| MIC | Co-authors the AI Guidelines for Business. Co-hosts the Watt-Bit Collaboration council | Domestic policy context |
| NEDO | Co-leads GENIAC with METI, and runs the computing subsidy and the call for the multimodal foundation model project | See our NEDO profile (in the solid-state battery series) |
| IPA | Secretariat of AISI. Receives equity investment for next-generation semiconductor businesses. Its competent minister is the Minister of Economy, Trade and Industry (jointly with the Prime Minister for some functions). Its site shows the English name Innovation Platform Agency, Japan | An agency under METI's supervision |
| Microsoft | In February 2024, Microsoft Azure was chosen as the computing provider for GENIAC. METI says the choice rested on an overall assessment of price, performance and contribution to the developer community, among other things | See our Microsoft profile, where one is published |
| UK AI Security Institute | Japan's AISI is listed with the UK and others among the institutes in the international network on AI evaluation (UK AISI post, 23 July 2026) | See our UK AI Security Institute profile |
| International Energy Agency (IEA) | The IEA's October 2026 report cites Japan's Watt-Bit Collaboration as an example of a public-private initiative that aims to support more flexibility from compute infrastructure | See our IEA profile |
METI does not endorse or certify any particular AI company (as far as we checked). This article does not name individual GENIAC grantees.
6. Outlook
| What can be read from the sources | Primary evidence | Type |
|---|---|---|
| The FY2027 AI budget is likely to differ from the request | The Cabinet Office published the FY2027 request (18 September 2026) at ¥2.9392 trillion plus items without a stated amount. That is an aggregate of ministries' requests, not an enacted budget. The Diet votes the budget | Inference |
| Development of the multimodal foundation model is decided year by year | NEDO's call says it will contract only for FY2026 and FY2027, and decide on continuation from FY2027 onward through annual stage-gate reviews | Sourced |
| The AI Guidelines for Business are likely to keep being revised | The guidelines themselves say they will be updated as a living document. Ver. 1.0 to Ver. 1.2 took about two years and two revisions | Inference |
| The AI Act may be revised after a review of how it is working | Supplementary Provision Article 2 requires the government to review the Act's implementation and take measures if needed. It gives no content or timing for any revision | Not yet confirmed |
| The bonds for advanced semiconductors and AI are a time-limited mechanism, running to FY2030 | Article 69 of the Act on the Promotion of Information Processing allows issuance only in each year from FY2025 to FY2030 | Sourced |
7. Glossary
- AI Act
- The Act on the Promotion of Research and Development, and Utilization of Artificial Intelligence-Related Technologies (Act No. 53 of 2025). A promotion framework that places the AI Strategy Headquarters in the Cabinet.
- Soft law
- Guidance or standards with no legal force, which parties are expected to follow voluntarily. The AI Guidelines for Business describe themselves this way.
- GENIAC
- Generative AI Accelerator Challenge. A project started by METI and NEDO in February 2024 to raise Japan's foundation model development capability.
- Energy Special Account
- One of the national government's special accounts. Support for AI and semiconductors is booked in a dedicated account within it, a set-up fixed by law.
- Budget request
- What each ministry submits to the Ministry of Finance for the next fiscal year. It is distinct from the budget the Diet votes, and the final figure can be lower or higher.
- Stage-gate review
- A review partway through a project that decides whether to continue or to change its scale or content.
8. References
- e-Gov Law Search Act for the Establishment of the Ministry of Economy, Trade and Industry (Act No. 99 of 1999; Articles 2 and 3, and the effective date in the supplementary provisions) (in Japanese). https://laws.e-gov.go.jp/law/411AC0000000099
- METI Principal organisational changes and authorised headcount for FY2026 (December 2025; total authorised headcount of 8,068) (in Japanese). https://www.meti.go.jp/main/yosan/yosan_fy2026/pdf/05.pdf
- METI Overview of the FY2026 initial budget for METI (7 April 2026; general account, Energy Special Account, AI and semiconductor items) (in Japanese). https://www.meti.go.jp/main/yosan/yosan_fy2026/pdf/01.pdf
- Ministry of Finance Feature on the FY2026 budgets of METI, the Ministry of the Environment, the courts, the National Police Agency and the Ministry of Justice (AI and semiconductors total, equity in IPA, multimodal foundation model) (in Japanese). https://www.mof.go.jp/public_relations/finance/202604/202604e.html
- METI AI and Semiconductor Industrial Base Strengthening Framework (over 10 trillion yen of public support, conditions for support, list of budget projects; updated 14 May 2026) (in Japanese). https://www.meti.go.jp/policy/mono_info_service/ai_semiconductor_frame/ai_semiconductor_frame.html
- e-Gov Law Search Act on the Promotion of Research and Development, and Utilization of Artificial Intelligence-Related Technologies (Act No. 53 of 2025; text, promulgated 4 June 2025) (in Japanese). https://laws.e-gov.go.jp/law/507AC0000000053
- Cabinet Office The AI Act (dates of promulgation and entry into force) (in Japanese). https://www8.cao.go.jp/cstp/ai/ai_act/ai_act.html
- Cabinet Office AI Strategy (publication of the FY2027 budget request, the basic plan and related meetings; 18 September 2026) (in Japanese). https://www8.cao.go.jp/cstp/ai/index.html
- Cabinet Office FY2027 AI-related budget requests (¥2.9392 trillion plus items without a stated amount, FY2026 budget of ¥502.7 billion, examples of METI requests) (in Japanese). https://www8.cao.go.jp/cstp/ai/yosan_9nendo_gaisan.pdf
- Cabinet Office AI Basic Plan (Cabinet decisions on 23 December 2025 and 14 July 2026) (in Japanese). https://www8.cao.go.jp/cstp/ai/ai_plan/ai_plan.html
- Cabinet Office Guidelines on ensuring appropriateness in AI R&D and use (decided 19 December 2025; table of ministries' AI guidelines) (in Japanese). https://www8.cao.go.jp/cstp/ai/ai_guideline/ai_guideline.html
- METI AI Guidelines for Business (Ver. 1.2, MIC and METI, 31 March 2026) (in Japanese). https://www.meti.go.jp/shingikai/mono_info_service/ai_shakai_jisso/20260331_report.html
- MIC and METI AI Guidelines for Business, Ver. 1.1 (28 March 2025; non-binding soft law, target audience, living document) (in Japanese). https://www.soumu.go.jp/main_content/001002576.pdf
- MIC and METI AI Guidelines for Business, Ver. 1.2, redline against Ver. 1.1 (text of Ver. 1.2, 31 March 2026) (in Japanese). https://www.soumu.go.jp/main_content/001064287.pdf
- METI Press release on selecting Microsoft as the GENIAC computing provider and opening a supplementary call (16 February 2024; start on 2 February 2024, subsidy rates) (in Japanese). https://www.meti.go.jp/press/2023/02/20240216004/20240216004.html
- METI Press release on 24 AI foundation model themes selected for GENIAC computing support (15 July 2025; round 1 with 10 projects, round 2 with 20) (in Japanese). https://www.meti.go.jp/press/2025/07/20250715001/20250715001.html
- METI GENIAC official site (overview of initiatives, counts displayed). https://geniac.meti.go.jp/
- NEDO Call for the multimodal foundation model development project for AI robotics and physical AI (24 March 2026; project period, stage gates) (in Japanese). https://www.nedo.go.jp/koubo/CD2_100431.html
- AISI About AISI (launched 14 February 2024, secretariat in IPA, activities, ministries involved) (in Japanese). https://aisi.go.jp/about/
- e-Gov Law Search Act on the Promotion of Information Processing (Article 59 on the competent ministers; Chapter 6 on advanced semiconductor and AI-related technology bonds) (in Japanese). https://laws.e-gov.go.jp/law/345AC0000000090
- MIC Publication of "Compilation 1.0 of the Watt-Bit Collaboration Public-Private Council" (12 June 2025) (in Japanese). https://www.soumu.go.jp/menu_news/s-news/01kiban04_02000258.html
- UK AI Security Institute International evaluation best practice and open questions in AI measurement (23 July 2026; institutes in the international network). https://www.aisi.gov.uk/blog/international-evaluation-best-practice-and-open-questions-in-ai-measurement
- IEA Powering Artificial Intelligence, Executive summary (14 October 2026; mention of the Watt-Bit Collaboration). https://www.iea.org/reports/powering-artificial-intelligence/executive-summary
9. Claim-to-source audit
| Claim in the text | Type | Source |
|---|---|---|
| Act No. 99 of 1999, headed by the Minister, in force on 6 January 2001 | Sourced | Reference 1 https://laws.e-gov.go.jp/law/411AC0000000099 |
| Authorised headcount of 8,068 at the end of FY2026 | Sourced | Reference 2 https://www.meti.go.jp/main/yosan/yosan_fy2026/pdf/05.pdf |
| FY2026 initial budget: general account of ¥375.4 billion, Energy Special Account of ¥2.533 trillion, AI and semiconductors ¥1.239 trillion (FY2025: ¥332.8 billion) | Sourced | Reference 3 https://www.meti.go.jp/main/yosan/yosan_fy2026/pdf/01.pdf |
| AI and semiconductors total of ¥1.239 trillion, ¥150.0 billion equity in IPA, ¥387.3 billion (new) for multimodal foundation models | Sourced | Reference 4 https://www.mof.go.jp/public_relations/finance/202604/202604e.html |
| Over ¥10 trillion of public support, over ¥50 trillion of investment, the three conditions for support | Sourced | Reference 5 https://www.meti.go.jp/policy/mono_info_service/ai_semiconductor_frame/ai_semiconductor_frame.html |
| Provisions of the AI Act (Articles 7, 13, 16, 18 to 26 and Supplementary Provision Article 2), and the absence of penalty provisions in its main body | Sourced | Reference 6 https://laws.e-gov.go.jp/law/507AC0000000053 |
| AI Act promulgated 4 June 2025 and fully in force on 1 September | Sourced | Reference 7 https://www8.cao.go.jp/cstp/ai/ai_act/ai_act.html |
| Publication of the FY2027 budget request (18 September 2026) | Sourced | Reference 8 https://www8.cao.go.jp/cstp/ai/index.html |
| Government-wide AI budget: about ¥502.7 billion in FY2026, ¥2.9392 trillion plus items without a stated amount requested for FY2027, examples of METI requests (about ¥896.4 billion and about ¥133.3 billion) | Sourced | Reference 9 https://www8.cao.go.jp/cstp/ai/yosan_9nendo_gaisan.pdf |
| Cabinet decisions on the AI Basic Plan (23 December 2025 and 14 July 2026) | Sourced | Reference 10 https://www8.cao.go.jp/cstp/ai/ai_plan/ai_plan.html |
| Guidelines on ensuring appropriateness (19 December 2025), and the AI Guidelines for Business in the table of ministries' guidelines | Sourced | Reference 11 https://www8.cao.go.jp/cstp/ai/ai_guideline/ai_guideline.html |
| Publication of Ver. 1.2 of the AI Guidelines for Business (31 March 2026) | Sourced | Reference 12 https://www.meti.go.jp/shingikai/mono_info_service/ai_shakai_jisso/20260331_report.html |
| Ver. 1.1 (28 March 2025), non-binding soft law, goal-based approach, target audience, living document, Ver. 1.0 in April 2024 | Sourced | Reference 13 https://www.soumu.go.jp/main_content/001002576.pdf |
| Ver. 1.2 reflects the Hiroshima AI Process international guidance and is described as non-binding soft law | Sourced | Reference 14 https://www.soumu.go.jp/main_content/001064287.pdf |
| GENIAC start (2 February 2024), subsidy rates (two-thirds for SMEs, one-half for large companies), selection of Microsoft Azure | Sourced | Reference 15 https://www.meti.go.jp/press/2023/02/20240216004/20240216004.html |
| GENIAC round 1 with 10 projects, round 2 with 20, round 3 with 24 | Sourced | Reference 16 https://www.meti.go.jp/press/2025/07/20250715001/20250715001.html |
| Counts shown on the GENIAC site (over 90 selected, over 300 participating, over 1,600 in the community) and the widening of its 2026 initiatives | Sourced | Reference 17 https://geniac.meti.go.jp/ |
| Call for the multimodal foundation model project (24 March 2026), FY2026 to FY2030, stage gates | Sourced | Reference 18 https://www.nedo.go.jp/koubo/CD2_100431.html |
| AISI launch (14 February 2024), secretariat in IPA, activities, METI among the ministries involved | Sourced | Reference 19 https://aisi.go.jp/about/ |
| IPA's competent minister (Article 59), the bonds in Chapter 6 (Articles 69 to 73), the ¥2.2 trillion transfer | Sourced | Reference 20 https://laws.e-gov.go.jp/law/345AC0000000090 |
| Compilation 1.0 of the Watt-Bit Collaboration council (12 June 2025) | Sourced | Reference 21 https://www.soumu.go.jp/menu_news/s-news/01kiban04_02000258.html |
| Japan's AISI listed among institutes in the international network | Sourced | Reference 22 https://www.aisi.gov.uk/blog/international-evaluation-best-practice-and-open-questions-in-ai-measurement |
| The IEA's report mentions Japan's Watt-Bit Collaboration | Sourced | Reference 23 https://www.iea.org/reports/powering-artificial-intelligence/executive-summary |
| The reading that the Minister is one of the Headquarters' members, the four-type classification, the arrangement of Fig. 2 | Our calculation | This article's own arrangement (our reading of references 4, 6 and 9) |
| Differences in definition between the AI and semiconductor budget and the government-wide AI budget, an AI-only budget total, how GENIAC counts selections, application of the Guidelines to foreign operators | Not yet confirmed | Not stated in the sources. Could not be confirmed; this article does not estimate them |
| In the outlook, the likelihood that the budget changes from the request and that the Guidelines keep being revised | Inference | Our reading of references 3, 8, 9 and 13 (inference) |
Last updated: 15 October 2026 / Troy Technical
Figures and dates in this article come from the official websites and documents of METI, MIC, the Cabinet Office, the Ministry of Finance, NEDO and AISI, and from the text of the laws (e-Gov). Passages marked "Inference" are our own interpretation of the primary sources.
