Japan's 27,500-chip Nvidia deal challenges China's grip on robotics

Japan has bought its way into the advanced models and chip industry after a year of the United States dominating the space, with China pouring subsidies into the machines that use them. 

Japan is directly challenging China’s lead in robotics, using the same Nvidia hardware that Chinese robot makers themselves depend on.

Why is Japan suddenly making a big AI chip purchase?

Japan’s trade ministry has announced that it will buy 27,500 of Nvidia’s (NASDAQ: NVDA) next-generation “Rubin” AI chips to power a state-backed AI project called Noetra, led by SoftBank (TYO:9984) and backed by ¥1 trillion (about $6.3 billion) over five years. Construction is scheduled to begin in April 2027, with operations expected to start in June 2028.

So far in the AI race, the U.S. has been protecting its lead in advanced models and chips, while China has owned the robotics front. Cryptopolitan reported that Chinese factories shipped roughly 97% of the world’s humanoid robots last year, about 19,000 units, and operate the largest industrial robot fleet on the planet, nearly 2 million units. 

Instead of trying to beat the U.S. or China in general-purpose AI, Japan is focusing on “physical AI,” which is the software that lets robots sense a factory floor and act on it. The Noetra consortium plans to build a massive 140-megawatt AI factory around the 27,500 Rubin chips. 

Nvidia CEO Jensen Huang framed Japan’s manufacturing background as the asset that makes the plan work, saying the manufacturing industry’s “know-how” is the country’s treasure. 

Noetra brings in 44 companies, including NEC, Honda, and Sony Group. Nvidia will supply its Nemotron and Cosmos foundation models plus chip technology for robots, while Fujitsu is building an operating system for physical AI. 

At a roundtable hosted by Fujitsu, Nvidia discussed manufacturing, logistics, and healthcare uses with robot makers Fanuc, Yaskawa Electric, and Kawasaki Heavy Industries. 

Nvidia is already developing manufacturing robots with Toyota and wants to widen the work to Honda, Mitsubishi Heavy Industries and Hitachi. 13 research bodies, including Tokyo University of Science, the University of Cambridge and the University of Oxford have been brought together in a national institute to push the underlying research.

The government is putting ¥387.3 billion (about $2.4 billion) into the effort this year alone. The computing power will sit in a large data center on the site of a former Sharp factory in Sakai, Osaka Prefecture.

However, due to its declining population, Japan is suffering from severe labor shortages. Huang pointed out the shortage, saying that automation, AI, and robotics will make the economy boom again. 

Can Japan catch up to China’s huge lead in robotics?

China’s dominance in robotics came from its electric-vehicle supply chain and roughly $300 billion in planned robotics and AI subsidies under its 2026-2030 five-year plan. Its lead in industrial robots is about 4.5 times Japan’s installed base. 

However, the Mercator Institute for China Studies found that Chinese humanoids lack precision and dexterity and lean heavily on Nvidia’s chips and software— the same hardware that Japan will be using. 

The Japanese government aims to capture more than 30% of the estimated ¥60 trillion (about $378 billion) global robotics market by 2040. 

Noetra’s president, Hironobu Tamba, who previously led SoftBank’s large language model development, said the goal is to provide a “genuine third option,” not just for Japan, but for others as well. Noetra plans to release an AI model by March next year, followed by regular updates, with a model tailored for robotics applications within a few years. 

Cryptopolitan recently reported that robotics is only about 1% of Nvidia’s revenue. The company is chasing that revenue growth in Japan even as it restricts chip sales to China under U.S. export rules.

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