Five Japanese companies — SoftBank, NEC, Honda, Sony, and AI startup Preferred Networks — formally established Japan AI Foundation Model Development on April 12, targeting a trillion-parameter model for physical AI: controlling robots, autonomous vehicles, and factory systems. Japan's NEDO has earmarked roughly ¥1 trillion (~$6.3B) over five years in AI support beginning fiscal 2026, and the new firm is positioned to receive those funds. The venture will train exclusively on Japanese data without routing through foreign cloud platforms, addressing data-sovereignty concerns as Japan faces a projected shortfall of 11 million workers by 2040. Japan Times coverage notes industrial banks Nippon Steel, MUFG, SMBC, and Mizuho also took stakes.