Japan Generative AI Market Research Report: Forecast (2025-2030)

Market Definition

Generative AI is an advanced version of AI that is specially designed to meet the scarcity of input data while training the models. The generative AI generates a large variety of content, like audio, video, text, etc., learning from the patterns in the existing data.

Market Insights & Analysis: Japan Generative AI Market (2025-30):

The Japan Generative AI Market size was valued at around USD 983.5 million in 2024 and is projected to reach USD 1,664.01 million by 2030. Along with this, the market is estimated to grow at a CAGR of around 9.16% during the forecast period, i.e., 2025-30. The Japan Generative AI Market growth is due to the rise in the digital infrastructure, increasing penetration of 5G internet services, growing diseases like cancer, alzheimer's, and others, the government support towards research and development of new technologies, the digitalization of the sectors, aging population, automated chatbot & multi-lingual models, etc., across the country.

The aged and outdated workforce in the corporate sector has pushed companies to adopt advanced robotic, automated, artificial intelligence services, and others, to maintain the productivity and operational efficiency of the sector. It integration of such advances like generative AI reduces the workload of the manpower, resulting in enhanced efficiency of the manpower. Further, the government support through the Society 5.0 vision plan accelerates the digital transformation of the sector, increasing the utility of the market in Japan.

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Moreover, the digitalization of the banks, financial services, and insurance (BFSI) sector has led to the increasing adoption of generative AI into their system due to the language barrier, increasing cyberattacks, repetitive processes, etc. The BFSI uses AI for fraud detection, KYC automation procedure, customer support through chatbots, and other key features of generative AI, which has surged its demand in the banking sector of Japan.

Thus, the growing FDI inflow, government support, the integration of advancements such as machine learning, cloud, IIoT, etc., in sectors such as digital infrastructure, manufacturing, healthcare, etc., are augmenting the size & volume of the Generative AI Industry in Japan.

Japan Generative AI Market Driver:

Healthcare Digital Transformation Drives Market Growth – The technological advances, such as Generative AI models in the healthcare sector, are extensively used for imaging & scanning of diseases and drug discovery. Additionally, for a growing need for automated medical records and customizing treatment plans for efficient and better treatment, the generative AI models are in high demand.

The use of generative AI models such as Generative Adversarial Networks (GANs) and Variational Autoencoders (VAEs) in diagnosis has surged lately because of the accuracy and automated diagnosis of illnesses like tumors, fractures, clots, and others, which require frequent and precise analysis to check the status and course of treatment. The growing cases of tumors and accidents, with approximately 979,300 new cancer cases in 2024, as per the National Cancer Centre, and about 343,750 casualties in Japan in 2024. Such increasing numbers and cases surge the demand for diagnosis in the country.  

Moreover, several MedTech companies are actively integrating generative AI models into medical equipment. For instance, NEC Bio is using generative AI in their T-cell receptors to identify the cancer cells. Similarly, Fujitsu & RIKEN, Fujifilm Medical Systems, and others are using generative AI in drug discovery and diagnostics equipment to attain more precise and detailed detection, thus enhancing the accuracy of the output scans and enlarging the drug library of Japan. Thus, such active usage of generative AI models and their integration across several diagnostics platforms and the healthcare sector for the efficient diagnosis, findings, and treatment drive the growth of the market in Japan.

Japan Generative AI Market Opportunity:

Increasing Government Support to Create Lucrative Growth Opportunities – The government of Japan is supporting the market through various initiatives like schemes, policies, plans, and investments in AI, to enhance the productivity, efficiency of the country and the sectors. The initiatives, such as society 5.0, the Generative AI Accelerator Challenge (GENIAC) program launched by the Ministry of Economy, Trade, and Industry in 2024, etc., are being launched to promote the adoption of AI and related services across the sectors by offering incentives, creating a favorable AI progressive environment. Approximately USD1.1 billion of investment in AI, including USD490 million allocated for generative AI, was announced by the Japanese government in 2024. Such investments and initiatives are undertaken for the development of the AI-friendly infrastructure, the development of language models, and for innovation through R&D programs, training programs, etc.   

Thus, such investments in the generative AI models and their integration across several sectors, for the efficient and automated progress, create an opportunity for the growth of the generative AI industry in Japan.

Japan Generative AI Market Challenge:

Data Privacy & Breaches Impeding Market Growth – The integration of advances such as AI and the advanced version like Generative AI across multiple sectors, including healthcare, automotive, IT, banking, and others has increased the traces of cyber footprints, creating an opening for hackers to easily access sensitive data for espionage, ransom, and phishing.

The excessive integration of AI services in cloud-based systems, automated procedures, Industrial Internet of Things (IIoT) devices, etc., and while training and testing these models and machineries, sometimes the data is leaked to unauthorized sources due to a malfunction, exposing the sensitive data and information, increasing the probability of a cyberattack. About 46 important entities, such as banks, airlines, telecom, etc., faced cyberattacks in late 2024 and early 2025. For instance, NTT Communication Corporation faced a data breach, affecting its 18,000 customers in 2025. Thus, integration of generative AI across multiple sectors is one of the key reasons behind the increasing cyberattacks, hence hindering the market growth & expansion.  

Japan Generative AI Market (2025-30): Segmentation Analysis

The Japan Generative AI Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2025–2030 at the national level. Based on the analysis, the market has been further classified as:

Based on Model Type:

• Large Language Models (LLMs)
• Text-to-Image Models
• Text-to-Video Models
• Text-to-Speech Models
• Speech-to-Text Models
• Code Generation Models
• Music & Audio Generation Models
• Multimodal Models
• Other Generative Models

Based on model type, the large language models (LLMs) hold the largest market share, of around 43%.  This market share is due to the widespread accessibility, low cost, versatility, language specialization, etc. The major key reason behind the proliferation of the LLMs in the Japanese market is their compatibility and the conversion of other languages into Japanese with accurate grammar and cultural, ethical values, which bridges the gap between the generated due to the language barrier, thus supporting the communication and multilingual interaction with consumers, across the industries.

The Use of LLMs is rising in the country due to an increase in the number of aging individuals, a shortage of workforce, and to minimize errors. All these factors are pushing different stakeholders to integrate automated models for repetitive tasks, like the generation of medical records, bookkeeping, logistics management, etc. Hence, large language models (LLMs) are getting traction among end-users, which ultimately increases the market share of this segment. Additionally, the LLMs in Japan are backed by the government, with their focus on the language models and supercomputers like Fugaku and ABCI 3.0, encouraging the growth of the LLMs in the national Generative AI Industry.

Based on End-User Industry:

• BFSI (Banking, Financial Services, and Insurance)
• Healthcare & Life Sciences
• Retail & E-Commerce
• Media & Entertainment
• IT & Telecom
• Manufacturing
• Automotive
• Education
• Government & Public Sector
• Others (Legal, Energy, Logistics, etc.)

Media & Entertainment holds the largest market share of about 34%. This is due to an increasing need for low-cost image & audio generation, rapid upgradations in technologies, government support, increasing investments, Society 5.0, etc. The media and entertainment sector is dependent on generative AI for the generation of images, videos, music, game design, templates, digital avatars, and various other applications. Further, the generations of synthetic content and images boost the growing need for new and immersive storylines, images, templates, and others. Moreover, the expansion of social media platforms and the growing need for content, and the emerging digital marketing industry of Japan, are integrating generative AI to its full potential, thus facilitating the large market share of the media and entertainment sector in Japan’s generative AI industry.

Japan Generative AI Industry Recent Development:

• 2025: NEC Corporation has utilized its video analysis and generative AI to develop a technology that provides advice for improving worker performance by identifying differences between model actions and actual movements. This newly developed technology enables the automatic display of appropriate advice for improving everything from precision tasks using one’s hands and fingers to tasks requiring the use of the entire body.
• 2025: Fujitsu piloted an on-device generative AI solution using Microsoft’s Phi-4 model, in collaboration with Headwaters and Japan Airlines. The initiative aimed to streamline cabin crew handover workflows by enabling real-time, secure summarization and task management directly on edge devices, enhancing operational efficiency.

Gain a Competitive Edge with Our Japan Generative AI Market Report

1. Japan Generative AI Market by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.

2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.

3. Japan Generative AI Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

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