Japan's Preferred Networks Raises $1 Billion for AI Supercomputer
Japan's AI Champion Gets a Billion-Dollar Boost
Preferred Networks, Japan's most valuable artificial intelligence startup, has raised $1 billion in a funding round led by SoftBank Group, Toyota Motor, and the Development Bank of Japan. The capital will fund construction of a domestic AI supercomputer and development of foundation models specialized for manufacturing, drug discovery, and materials science.
CEO Toru Nishikawa said the investment "gives Japan its own AI infrastructure stack — not dependent on US cloud providers for compute or models." The company's valuation has reached approximately $8 billion, making it Japan's most valuable private technology company.
Supercomputer Plans
Preferred Networks will build an AI computing center in Kashiwa, Chiba Prefecture, housing 4,000 Nvidia H100 GPUs and 2,000 of the company's custom MN-Core accelerator chips. The facility is designed to provide compute capacity equivalent to a top-10 global supercomputer, with operations beginning in mid-2026.
The MN-Core chip, developed in-house by Preferred Networks and manufactured by TSMC, is optimized for sparse matrix computations common in large neural network training. The company claims MN-Core delivers three times the performance per watt of Nvidia GPUs for specific AI training workloads.
Industry Foundation Models
Rather than competing with OpenAI or Google on general-purpose chatbots, Preferred Networks is developing domain-specific foundation models. A manufacturing model, trained on data from Toyota and Fanuc, can predict equipment failures and optimize production schedules. A drug discovery model, developed with Chugai Pharmaceutical, has identified three candidate compounds currently in preclinical trials.
Nishikawa said the strategy reflects Japan's industrial strengths. "Japan won't win the chatbot race. But Japan has the world's best manufacturing data, materials science expertise, and pharmaceutical research. Our models will be the best in the world at those tasks."
National Significance
The investment aligns with Japan's national AI strategy, which calls for developing sovereign AI capabilities. SoftBank Group CEO Masayoshi Son said Preferred Networks "is exactly the kind of company Japan needs — world-class AI technology applied to industries where Japan has genuine competitive advantages."
Toyota CTO Hiroki Nakajima confirmed that Toyota's factory network will serve as a testing ground for Preferred Networks' manufacturing AI, starting with three plants in Japan and expanding to overseas facilities. "This partnership combines Toyota's manufacturing knowledge with Preferred Networks' AI capabilities in a way that neither company could achieve alone," Nakajima said.
