Mitsubishi Heavy to Invest ¥10 Billion in PFN, Strengthening Alliance to Develop Domestic Defense AI

Mitsubishi Heavy Industries has entered into a capital and business alliance agreement with AI startup Preferred Networks, Inc. (PFN), under which it will invest ¥10 billion in total by subscribing to a third-party allotment of new shares. Through the agreement, the companies will strengthen their cooperation with the aim of developing domestically produced AI for defense equipment. The agreement is scheduled to be implemented on 31 August and will be finalized following approval at PFN’s shareholders’ meeting and other procedures.

The companies formed a business alliance in June to jointly develop AI for equipment and systems in the national security field. Through the latest investment, they will further deepen their cooperation in research and development. PFN is pursuing initiatives with a view to building AI for government institutions in Japan, while Mitsubishi Heavy is promoting the development and operation of domestic technologies suited to embedding AI in defense equipment.

PFN has strengths in AI semiconductors, computing infrastructure and the development of foundation models for generative AI. Combining these capabilities with Mitsubishi Heavy’s defense equipment development, the companies will advance the implementation of AI in mission-critical systems for critical infrastructure and national security. The investment is reportedly on a scale comparable to those made by Toyota Motor and SBI Holdings.

PFN positions the alliance as part of its effort to build Japanese-made AI solutions. Developments in the Japanese government’s policy on the use of AI for active cyber defense could also provide support. As Japan pursues self-sufficiency and digitalization in the deployment of AI in defense equipment, building a development structure through capital alliances among domestic companies is recognized as a key issue.