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Japan, once seen as a major economic competitor to the United States, is now seeking collaboration with the world’s largest economy in emerging tech sectors such as artificial intelligence, semiconductors, and clean energy. Prime Minister Fumio Kishida recently urged American CEOs to invest in Japan, emphasizing that any investments would also benefit the United States. Japan is looking to strengthen economic ties with the US, as last year Japanese foreign direct investment in America exceeded $750 billion, making Japan the biggest foreign investor in the US.

During a lunch event in Washington, Microsoft announced a $2.9 billion investment to expand its cloud computing and AI infrastructure in Japan, as well as opening its first Microsoft Research Asia lab in the country. The event was attended by top executives from companies like IBM, Micron Technology, Boeing, and Pfizer, highlighting the growing business relations between the US and Japan. The closer ties between the two countries come amidst regional security threats such as North Korea’s weapons testing, China’s aggression in the South China Sea, and tensions with Russia.

Prime Minister Kishida praised the collaboration between the US and Japan in the semiconductor industry, specifically mentioning the partnership between Tokyo-backed chipmaker Rapidus and IBM. The Japanese government has approved subsidies worth billions of dollars for Rapidus to build a semiconductor fabrication plant on the island of Hokkaido. This collaboration aims to bring advanced chip technology to Japan and bolster Japan’s position in the semiconductor industry, where it has lagged behind companies like TSMC, Intel, and Samsung.

In an effort to dispel doubts about the strength of the Japanese economy, Prime Minister Kishida outlined Japan’s plans to break free from deflationary sentiment and shift away from aggressive monetary easing policies. Japan recently raised interest rates for the first time in 17 years, signaling a move towards a more stable economic environment. The Prime Minister expressed optimism about the Japanese economy’s outlook, aiming for a turnaround in 2024. Amidst increasing tech rivalries between the US and China, Japan is positioning itself as a key player in the global tech industry through investments in AI, semiconductors, and clean energy.

The US-Japan business partnership in the tech sector is seen as a strategic move to strengthen economic cooperation while addressing common security challenges in the region. Japanese companies are eager to collaborate with American counterparts to leverage each other’s strengths in technological advancement. The shift towards greater investment in tech sectors like AI and semiconductors reflects a broader trend of countries seeking to enhance their technological capabilities to stay competitive in the global market. As Japan seeks to revitalize its economy and regain its position as a major player in the semiconductor industry, cooperation with US companies is seen as a crucial step towards achieving these goals.

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