Economy June 5, 2026 01:03 AM

Japan Warned It Could Become an 'AI Colony' if It Lags in Development, Digital Minister Says

Minister defends law change to let AI firms train models on sensitive records without individual consent as legislature debates the measure

By Nina Shah
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Japan's digital minister, Hisashi Matsumoto, warned that the country risks becoming an 'AI colony' if it does not accelerate domestic AI development. He defended a government-drafted bill to amend the personal data protection law so AI developers can use sensitive records, including medical and criminal files, for model training without individuals' consent. The measure, which passed the lower house, faces opposition concerns over data breach risks as it moves through the upper house. The government is pursuing subsidies, procurement and legal changes while courting U.S. tech firms and supporting domestic companies and chipmakers to expand local AI capacity.

Japan Warned It Could Become an 'AI Colony' if It Lags in Development, Digital Minister Says
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Key Points

  • Digital Minister Hisashi Matsumoto warned Japan risks becoming an 'AI colony' if it falls behind in AI development.
  • A government-drafted bill would allow AI developers to train models with sensitive data, including medical and criminal records, without individual consent; it passed the lower house and is now in the upper house.
  • The government is using subsidies, targeted procurement and legal changes, while engaging U.S. firms like Microsoft and OpenAI and supporting domestic players such as SoftBank, Sakura Internet and chipmakers to expand local AI capacity.

Japan's digital minister issued a stark caution about the nation's place in the global technology landscape, saying the country could face a new kind of dependency if it fails to keep pace with advances in artificial intelligence. "I hope many Japanese people understand that we need to press ahead with AI development, or we’ll end up becoming an ’AI colony'," Digital Minister Hisashi Matsumoto told reporters.

Matsumoto made the remarks while defending a proposed amendment to Japan's personal data protection law. The government-drafted bill would permit AI developers to train models using certain categories of personal data - explicitly cited examples include medical and criminal records - without securing consent from the individuals concerned.

"The point of this change is that, with AI development moving so fast, Japan can’t afford to fall behind," Matsumoto said, framing the legal revision as a response to the speed of technological change.

Opposition parties have raised objections to the bill, pointing to potential risks tied to data breaches and the handling of sensitive personal information. The legislation passed the lower house of parliament last week and is currently under consideration in the upper house, where debate is ongoing.

The amendment is part of a broader push by the Japanese government to strengthen domestic AI capabilities amid an intensifying global contest largely described as led by the U.S. and China. Policy tools include subsidies, targeted government procurement and changes to the legal framework intended to accelerate development and deployment of AI technologies.

Parallel to those domestic measures, Japan has sought investment and technology access from U.S. companies. The government has courted partnerships with firms such as Microsoft and OpenAI, within the framework of U.S.-Japan security ties. At the same time, policymakers have supported homegrown industry participants - including SoftBank, Sakura Internet and various chipmakers - in efforts to build out domestic AI models and computing infrastructure.

Those combined steps reflect the administration's aim to reduce reliance on foreign technologies by bolstering local capacity, while navigating the legal and privacy trade-offs that accompany accelerated AI development. The outcome of the upper house debate will determine whether the personal data protection rules are loosened to permit the broader use of sensitive records for AI training.


Risks

  • Data breach and privacy concerns tied to permitting AI training on sensitive records could affect healthcare, criminal justice data stewards and technology providers.
  • Political and legislative uncertainty as the bill moves through the upper house may delay or alter legal changes, impacting companies planning AI development and procurement.
  • Dependence on foreign technology and partnerships could persist if domestic capacity expansion by chipmakers and local firms is slower than anticipated, affecting the broader tech and semiconductor sectors.

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