New Government Policy Shows Japan Favors a Light Touch for AI Regulation
In early 2024, it seemed clear among the major developed economies that significant new regulatory frameworks for artificial intelligence (AI) were imminent. The United States had passed a sweeping AI executive order, and the European Union was preparing to pass the EU AI Act. Japan appeared to be following suit with plans for new legislation aimed at regulating AI technology.
However, by the end of 2024, the prospects for tough AI regulation in the United States and Europe shifted significantly. The U.S. did not pass AI legislation, and President Trump repealed the previous administration’s AI executive order. The European Union, still working on implementing the AI Act, faced concerns about stifling innovation with stringent regulations.
On February 4, 2025, Japan’s Cabinet Office released the interim report of its AI Policy Study Group, outlining a different vision for AI regulation than previous proposals. This report represents a cautious stance, preferring reliance on existing sector-specific laws instead of imposing sweeping AI-specific regulations, consistent with the principle of technological neutrality.
Maintaining a Sector-Specific Approach to AI Regulation
The AI Policy Study Group serves as the central body overseeing Japan’s AI policy development. The Interim Report emphasizes the importance of voluntary risk-mitigation initiatives by businesses while committing the government to monitor emerging risks. It suggests new legislation to establish a strategic leadership body for information collection without legal sanctions, reflecting the complex nature of AI risks.
AI systems amplify existing risks rather than introducing new types of risks. The Interim Report’s reliance on existing legal frameworks and voluntary industry measures appears reasonable and aligns with Japan’s established policy approach.
Balancing Business-Led AI Governance and Strategic Government Leadership
The report indicates that the Japanese government will depend on businesses’ commitments to address AI risks under current laws. Nonetheless, startups, which drive innovation, often lack the resources to manage these challenges effectively. Hence, the proposed government leadership body should focus on reducing the cost and complexity of AI implementation.
By providing clarifications on legal interpretations, guidance on AI safety evaluations, and updates to risk management frameworks, the government can support businesses in navigating AI governance. Previous proposals for guidance on copyrights, intellectual property rights, and personal information indicate a proactive approach to legislation.
The Key to Success: Transparency and Effective Guidance
For Japan to transition successfully, it should adopt a transparent multi-stakeholder process, moving away from closed discussions. Information collected from businesses should not serve to criticize but to gather best practices and evaluate proactively.
Japan’s Response to the DeepSeek Shock
The emergence of DeepSeek, a high-performance AI model from China, prompted attention in Japan. Although the Interim Report was drafted before the DeepSeek Shock, its content largely remained unchanged. Japan has no specific restrictions on DeepSeek’s use by private entities, and many tech companies are developing their own versions of the model.
Although concerns regarding national security risks associated with DeepSeek persist, existing laws regulate the manipulation of information and unauthorized data use. New legislation hinted in the Interim Report aims to address emerging AI risks within Japan’s regulatory framework.
Looking Ahead: Japan’s AI Policy in a Shifting Landscape
As the global outlook for AI governance becomes increasingly uncertain, Japan’s role in international rulemaking through frameworks like the G7 and OECD will grow in importance. The challenge lies in designing legal systems that can manage various risks while maximizing the benefits of AI.
