Japan warns it could become an AI colony without faster development

Japan risks becoming an “AI colony” if it cannot speed up its own artificial intelligence development, Digital Minister Hisashi Matsumoto warned in Tokyo, casting the issue as one of economic sovereignty as much as technology. Matsumoto said Japan could fall into “a new form of colonialism” in the AI era if it lags behind the pace set by the United States and China, where the most powerful platforms, models, and data ecosystems are moving faster and shaping global dependence.

The warning came as Matsumoto defended a government bill to revise Japan’s personal data protection law and make it easier for AI developers to train models on sensitive information. Under current rules, companies must obtain consent to collect sensitive personal data, including medical records, disabilities, and criminal records. The draft would allow some of that collection without consent when it is used only for statistical or limited purposes, a change officials say is needed to build the larger data sets that modern AI systems require.

The proposal is part of a broader national effort to treat AI as core industrial infrastructure. Japan adopted a Basic Policy on the Ideal Form of Data Utilization Systems on June 13, 2025, linking data reform to population decline, productivity, and administrative modernization. The country also enacted the AI Promotion Act, which framed AI-related technology as fundamental to Japan’s economy and society and set up a basic plan and strategic headquarters. Matsumoto, a doctor by training who was born in Ishikawa Prefecture in 1962 and first won a House of Representatives seat in 2021, has become one of the government’s most forceful voices for acceleration.

But the tradeoff is politically sharp. Opposition parties have warned that opening access to sensitive records could expose people to privacy violations and security breaches if companies or government agencies fail to protect the information. The draft bill tries to pair the loosened consent rules with tougher penalties, including administrative fines tied to profits from unlawful data handling, stricter rules for children’s information, and special treatment for biometric and facial-recognition data. An earlier plan for consumer class actions was dropped during drafting.

For Japan, the bottlenecks are clear: a cautious privacy regime, smaller domestic AI scale than the U.S. and China, and a policy system still trying to align data access with industrial policy. The government has decided that standing still carries its own risk. In the AI race, dependence can become a form of leverage, and Tokyo is now rewriting its rules to avoid being on the losing side of that bargain.