[Explainer] What Is the “Physical AI” NVIDIA Expects From Japan? Key Japanese Listed Companies to Watch

Hey everyone, Hirokichi here.

On July 16, 2026, NVIDIA CEO Jensen Huang visited Japan and declared that “the next industrial revolution will be made in Japan.” The keyword is “physical AI.” In this post, I will explain what the physical AI NVIDIA expects from Japan actually is, and introduce the Japanese listed companies most closely involved.

What is physical AI? AI that “moves” in the real world

Physical AI is AI built into machines such as robots and cars that perceives the real world and acts autonomously. If generative AI like ChatGPT is “AI that creates text and images,” you can think of physical AI as “AI with a body that does physical work.”

NVIDIA made physical AI the central theme of CES (one of the world’s largest tech shows) in January 2026. The company has lined up technologies such as “Cosmos,” a foundation model that serves as a robot’s brain, “Omniverse,” a digital twin platform that recreates the real world in digital space, and “Isaac,” a training and simulation environment for robots. After generative AI, physical AI is the next battleground NVIDIA aims to dominate.

Why does CEO Jensen Huang count on Japan?

In an interview with Nikkei, Huang said physical AI is a great opportunity for Japan and stressed that “a nation’s intelligence should be developed domestically.”

I think there are three big reasons Japan is expected to shine. (1) Japan has world-class industrial robot makers such as Fanuc and Yaskawa Electric. (2) Japanese factories have accumulated decades of real-world data and know-how. (3) Japan faces a serious labor shortage due to its aging population, so it needs physical AI in the real world more urgently than almost any other country. The U.S. led the race for AI “brains,” but when it comes to building AI “bodies,” Japan has the edge.

A “Team Japan” alliance: Fujitsu, Fanuc, Yaskawa, and Kawasaki Heavy

On July 16, Fujitsu announced that it will start business studies in the physical AI field with Fanuc, Yaskawa Electric, and Kawasaki Heavy Industries. With technical support from NVIDIA, the group will build a “cooperative control platform” for robots that connects digital space and the real world.

The roles are clearly divided: Fujitsu will work with Fanuc on manufacturing, with Yaskawa on retail and logistics, and with Kawasaki Heavy on healthcare. “Version 1” of the platform is scheduled to be delivered to the partner companies within 2026, followed by “Version 2” in 2027. At the announcement event, Huang said the next industrial revolution will also be born in Japan.

The national “FRONTia” project and a giant AI factory

The same day brought a national-level announcement as well. Noetra, a new company anchored by SoftBank, Sony Group, NEC, and Honda, will build a national-scale AI factory equipped with more than 27,500 of NVIDIA’s latest “Rubin” GPUs, as announced by NVIDIA. It is described as the world’s first national AI infrastructure and will serve as the computing base for “FRONTia,” a physical AI foundation model project led by Japan’s Ministry of Economy, Trade and Industry (METI).

METI and NEDO (Japan’s innovation funding agency) will provide up to 1 trillion yen over five years for FRONTia. On top of that, the government’s new growth strategy reportedly calls for public-private investment of around 10.5 trillion yen across 17 strategic sectors including AI, according to media reports. As the chart above shows, money on a whole different scale is starting to move at the national level.

Japanese listed companies involved in physical AI

Now let’s look at the main Japanese listed companies involved in physical AI from an investor’s point of view.

First, the four-company alliance. Fujitsu (6702) is at the core of the cooperative control platform, supplying CPUs and software. Fanuc (6954) is a global leader in industrial robots and has already announced partnerships with NVIDIA in December 2025 and with Google in May 2026. Yaskawa Electric (6506) is a world leader in servo motors and robots, and plans to concentrate 120 billion yen of investment in its physical AI business by the fiscal year ending February 2030. Kawasaki Heavy Industries (7012) is in charge of the healthcare field and is also drawing attention for its humanoid robot development.

Next, the Noetra camp behind the AI factory: SoftBank (9434), Sony Group (6758), NEC (6701), and Honda (7267) form the core, with roughly 44 companies and organizations participating. Looking further down the supply chain, Harmonic Drive Systems (6324), which holds a top global share in the precision speed reducers essential for robot joints, is also frequently named as a representative physical AI stock.

My take: three things to watch from here

Personally, I feel this announcement is the starting gun for “act two” of the AI market. Here is what I am watching. (1) How much “Version 1” of the cooperative control platform, due within 2026, actually achieves in real workplaces. (2) The true capability of the homegrown foundation models developed under FRONTia. (3) When physical AI revenue starts showing up in each company’s earnings.

Theme stocks tend to move on expectations, and these names have swung sharply with every headline. I believe this is a genuine long-term theme, but I want to avoid buying at the top and keep checking the substance in each earnings report.

Let’s keep at it, slow and steady. See you next time!

日本語版はこちら → 【解説】エヌビディアが日本に期待する「フィジカルAI」とは？

* This article is for informational purposes only and does not recommend any specific investment. Please make investment decisions at your own responsibility.

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