A fresh surge in AI funding is reshaping how nations build and control advanced, locally tailored machine learning systems. Sakana AI raises $135M Series B for Japan-focused AI models, a ¥20 billion round that accelerates local model development. The two-year-old startup now commands a post-money valuation near $2.65 billion, and it plans rapid expansion and hiring.
Because investors including MUFG, Khosla Ventures, Macquarie Capital, NEA, Lux Capital and In-Q-Tel backed the round, Sakana can deepen research and development, scale localized data collection, hire engineers, expand sales and distribution, and pursue enterprise deals in manufacturing, defense and government sectors across Japan and beyond. As a result, Japan could see a surge in sovereign AI that reflects local language, culture and regulatory priorities.
Sakana AI raises $135M Series B for Japan-focused AI models: A Funding Milestone
Sakana AI raises $135M Series B for Japan-focused AI models, a ¥20 billion round that pushes the startup to a roughly $2.65 billion post-money valuation. Because the company launched in 2023, this rapid climb signals intense investor interest in localized large language models. As a result, Sakana can scale R&D and expand into enterprise verticals across Japan.
Key details of the Series B
- Amount raised: ¥20 billion, about $135 million
- Post-money valuation: about ¥365 billion, or $2.65 billion
- Pre-money valuation: roughly $2.5 billion
- Total capital to date: about $379 million after this round
- Founders: Llion Jones, Ren Ito and David Ha
Major investors and strategic backers
- MUFG (Mitsubishi UFJ Financial Group) MUFG because it brings local banking scale
- Khosla Ventures Khosla Ventures which adds deep venture expertise
- Macquarie Capital Macquarie Capital and NEA NEA providing growth capital
- Lux Capital Lux Capital and In-Q-Tel In-Q-Tel for strategic and national security angles
Why this matters for Japan’s AI ecosystem
This funding validates demand for sovereign AI that mirrors Japanese language and culture. Furthermore, Sakana has said, “We plan to deploy the new capital for not only R&D, including [AI] model development, but also to expand our workforce for engineering, sales, and distribution teams in Japan.” Therefore, expect faster productization for manufacturing, defense and government use cases. Finally, the round could spur more local startups to pursue specialized, culturally aware AI models.
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Company: Sakana AI
Funding amount: $135 million (¥20 billion)
Round: Series B
Date: 2025
Focus area: Japan-focused language models, sovereign AI, enterprise solutions -
Company: Preferred Networks
Funding amount: Undisclosed strategic investments (reported large injections)
Round: Strategic / corporate rounds
Date: 2019–2024
Focus area: Deep learning for manufacturing, robotics and industrial AI -
Company: ABEJA
Funding amount: Undisclosed (multiple rounds)
Round: Series C/D (various)
Date: 2019–2022
Focus area: Retail analytics, enterprise AI and data platforms -
Company: Rapyuta Robotics
Funding amount: Undisclosed (venture and strategic backing)
Round: Series B / strategic
Date: 2020–2023
Focus area: Robotics platforms and edge AI for logistics
Insights and Impact of Sakana AI raises $135M Series B for Japan-focused AI models
The ¥20 billion Series B accelerates development of Japan-focused AI models and local LLM capabilities. Because Sakana prioritizes Japan specific language and culture, the capital will speed R&D, model fine tuning, and enterprise productization. As a result, the raise validates sovereign AI strategies and attracts strategic investors and partners. TechCrunch reports the round and valuation in detail: TechCrunch.
Immediate technology and market impacts
- R&D acceleration for Japan-centric LLMs and data pipelines, enabling higher-quality language understanding
- Talent expansion, because the company will hire engineers, sales staff and researchers across Japan
- Enterprise adoption in manufacturing, defense and government, therefore opening new revenue streams
- Increased competition, which may push incumbents to localize models more aggressively
- Higher ecosystem investment, thus signaling greater VC interest in the Japan AI market
Market context and expert signals
Statista projects Japan’s AI market at about US$10.15 billion in 2025, with generative AI growing rapidly: Statista AI Market and Statista Generative AI Market. Furthermore, industry observers expect this Series B funding to speed commercialization of specialized AI solutions. They also expect the round to spur more startups focused on localized models.
Sakana AI’s ¥20 billion Series B, roughly $135 million, marks a decisive funding milestone for localized models. The raise lifts the company to about $2.65 billion post-money valuation and accelerates R&D and hiring. Because investors from MUFG to Khosla and In-Q-Tel backed the round, Sakana can deepen enterprise outreach.
This funding validates demand for Japan-focused AI models and signals stronger investor confidence in the Japan AI market. As a result, startups and incumbents may prioritize localized language, compliance, and cultural tuning. Furthermore, firms developing solutions for manufacturing, defense, and government now face clearer commercialization paths.
Looking ahead, Sakana’s momentum should accelerate ecosystem investment and spur new product launches. Therefore, track developments closely because localized models will shape how AI integrates with Japanese business and policy. The outlook remains optimistic for Japan’s AI industry as it builds tailored, sovereign solutions.
Frequently Asked Questions (FAQs)
What exactly happened in the Series B round?
Sakana AI closed a ¥20 billion Series B, about $135 million, in 2025. The round values the company at roughly $2.65 billion post-money. Because major investors joined, the funding signals strong confidence in Japan-focused AI models.
Who are the investors and why do they matter?
Backers include MUFG, Khosla Ventures, Macquarie Capital, NEA, Lux Capital, and In-Q-Tel. These investors bring capital, industry connections, and strategic partnerships. As a result, Sakana gains access to banking, enterprise and government channels.
How will Sakana spend the new capital?
The company said it will invest in R&D, model development, and hiring. It will also expand sales and distribution teams in Japan, therefore accelerating enterprise deployments in manufacturing, defense, and public sector.
What does this mean for the Japan AI market?
The funding validates sovereign AI and localized LLM strategies. Furthermore, it should spur talent hiring, more VC interest, and competitive pressure on incumbents to localize models. Thus, market momentum for Japan AI will likely grow.
How should readers follow developments?
Watch Sakana’s product releases and partnership announcements. Subscribe to reputable tech outlets and monitor regulatory changes in Japan. Staying informed will reveal new opportunities and risks as localized AI matures.
