Act on the Promotion of Research, Development, and Utilization of AI-Related Technology (“Japan AI Act”) establishes a national policy framework to promote research, development, and use of AI-related technologies in Japan, aiming to drive economic growth, public welfare, and global competitiveness in AI. This act defines “AI-related technology” broadly; technologies capable of substituting human cognitive functions as well as information-processing systems using such technologies. Japan adopted a policy-based approach to promote AI development as a compelling alternative to the “hard-law” regulatory models seen in other jurisdictions.
Key Features of the Law
1. The Japan AI Act was enacted on May 28, 2025; many provisions took effect on June 4, 2025, and became fully effective by September 1, 2025.
2. This AI law is an innovation-first, soft-law framework. The Act treats AI as a foundational driver of Japan’s economic and social development. Its goal is to make Japan the world’s most AI-friendly country by prioritizing innovation, research, development, and societal utilization of AI technology.
3. This AI law establishes four core principles: (a) Enhancing AI research and development capabilities and international competitiveness; (b) promoting coordinated initiatives among stakeholders from research and development through implementation; (c) ensuring safeguards such as transparency around AI risks; and (d) taking a leadership role in international cooperation.
4. The Act is non-punitive; it does not impose any penalties and relies on voluntary compliance and industry self-regulation, and existing legal frameworks such as data protection and copyright laws to address risks, including data privacy breaches and ethical issues. This law authorizes government to issue advisory guidance to businesses when AI is used in a harmful manner.
5. The Act explicitly establishes a central governing body for AI strategy headed by the Prime Minister and assigns its responsibilities for drafting and implementing a Basic Plan on AI, while promoting stakeholder collaboration. The stakeholders include the centralized and local government, research and development institutions, AI-utilizing business operators, and citizens.
6. The Act assigns primary responsibility for formulating AI policy to the central government; however, it permits local government to develop and adopt policies that align with the central government’s policy and the Act’s underlying philosophy.
7. The Act mandates that both central and local governments take necessary measures to develop AI skilled workforce.
8. The Act emphasizes the promotion of education and public awareness regarding AI.
Advocacy for Adoption by the U.S. Federal Government
The U.S. Federal Government should consider adopting portions of the Japan AI Act rather than the law in its entirety. The Act’s emphasis on promoting AI research and development, enhancing international competitiveness, and relying on voluntary, innovation-friendly guidelines would likely benefit the U.S. federal AI strategy. However, the Act lacks statutory penalties and a clear private right of action, which may allow business to prioritize profit over safety and privacy, particularly in high-risks AI applications. This approach could lead to increased consumer harm and more complex legal issues to litigate.
Both Japan and the U.S. are global AI leaders facing fierce competition from China and EU, where over regulation could slow down innovation. The Japan AI Act treats AI technologies as the key driver to the socioeconomic growth, avoiding hard-law approach that may substantially slow down AI development and innovation. Currently, the U.S. lacks a comprehensive, integrated federal AI policy. Likewise, Japan, the U.S. could establish a central governing body for AI strategy that will create AI policy and guidance, coordinate with all federal branches, state and local governments, research and development institutions, and businesses. The central governing body should provide adequate funding for AI research and development, provide a secure means to share research data among AI development institutions and businesses, work on developing AI skilled workforce, and raise general awareness in public for the usage of AI. The Japan AI Act mandates guidelines update as soon as technology evolves, rather than waiting for slow legislative process. This agile governance process can greatly benefit the AI development in the U.S. while maintaining necessary controls. Additionally, the governing body may collaborate with the National Institute of Standards and Technology (NIST) to publish agile voluntary AI guidance and frameworks. This practice may help the U.S. maintain edge in the AI supremacy.
The Japan AI Act is voluntary and self-regulatory in nature, and likely insufficient for the U.S. ecosystem, where AI technologies pose significant risks that requires mandatory accountability and regulatory enforcement. Japan AI Act does not have any penalty provision for AI harms. Due to these it will be challenging to ensure business are developing AI fairly without violating any existing laws. The U.S. may add mandatory risk classifications and audit for high-impact AI systems, and penalty for any violations.
The Japan AI Act lays an excellent foundation for AI development and governance. The U.S. could greatly benefit from adopting a similarly open approach to promoting AI innovation, while also adding mandatory risk assessments and independent audits to ensure AI systems are safe for end users. In addition, the U.S. should impose meaningful penalties for violations to strengthen accountability.