The Japanese government is planning to invest approximately $65 billion to support the country’s semiconductor and AI industries.

The initiative, which will run until the end of the decade, is expected to generate ~$104bn in public and private investment during the period.

According to a report from Reuters, this new round of funding will specifically target state-backed chip foundry Rapidus and other AI chip suppliers.

Rapidus was founded in November 2022 when the Japanese government and eight Japanese technology and automotive firms, including SoftBank, Sony, and NTT, invested more than $500 million to launch the business.

Speaking at a news conference this week, Japanese Prime Minister Shigeru Ishiba did not provide any information about how the venture would be financed but said the government would not issue deficit-covering bonds.

In February 2024, the Japanese government announced plans to invest around $300m in a research group focused on developing advanced chip technology. In the 12 months preceding that announcement, the government pledged significant funds to bolster its domestic semiconductor manufacturing sector, including the $500m deal to launch Rapidus and a $6.4bn government buyout of equipment maker JSR.