Two years ago, as AI-generated images and anime began to infiltrate social media, illustrator Momoji Mokume despaired that Japan was turning into “a paradise for copyright infringement and machine learning”. 

“I thought the job of an illustrator would disappear and even the culture of creativity would be lost,” said Mokume, a 21-year-old university student in Tokyo, using his pen name as illustrator, anime artist and musician. “It felt like there was no future for us.”

During that period, global tech industry executives including Meta’s Mark Zuckerberg and OpenAI’s Sam Altman flocked to Tokyo to meet Prime Minister Fumio Kishida, lured to the huge potential of AI in an economy confronting ageing demographics and chronic labour shortage. OpenAI later chose Tokyo for its first Asia office.

While Japan lacks its own homegrown AI giants, some tech companies are drawn to the market for another reason: the country’s copyright law which critics say allows widespread use of copyrighted images and other materials for commercial purposes to train AI models without seeking permission.

“There are many reasons AI companies are attracted to Japan, including the need for its companies to rapidly develop their digital capabilities and the country’s declining population, which is very open to AI,” said Yutaka Matsuo, a professor at Tokyo University and chair of the government’s AI council.

“One other attraction is that AI companies are permitted to learn from information without infringing copyright laws,” he added.

Japan’s open-armed approach to AI stands out at a time when other places such as the US, EU and China are developing stricter rules over how tech companies train their AI models. Leaders in the creative industries have also voiced concerns about their work being used by AI companies without permission or a fee. 

Mokume is among the tens of thousands of illustrators, artists and musicians who have spoken out against the lack of protection for copyright holders. 

In response, the Agency for Cultural Affairs released new guidelines in March that outline cases in which AI companies could be held liable for copyright infringement but has stopped short of recommending a revision to the law. 

“As it relates to generative AI, Japan’s existing Copyright Act does not contribute to protecting creators. In fact, it is focused on restricting the rights of creators,” the Japanese Society for Rights of Authors, Composers and Publishers said in a statement to the Financial Times. 

The outcry from its domestic creative industry comes even as Kishida has spearheaded efforts at the G7 and other international meetings to tackle what he has called the “dark side” of AI, calling for international guidelines to govern the use of the emerging technology to reduce the risk of disinformation. 

“Regulations are said to be prone to hindering innovation but it is necessary to set firm rules that are transparent in order to create an environment where users feel it is safe to use generative AI since it is a technology that has such an immense societal impact,” said Takeaki Matsumoto, minister for internal affairs and communications.

Beyond the copyright rules, some AI executives say Japan is an attractive market for other reasons, from the opportunities in private companies and public institutions, the support from the government and the ability to stand out from what is becoming a crowded field in the US. 

David Ha co-founded AI start-up Sakana in Tokyo, having previously led Google’s AI research arm in Japan and worked at London-based start-up StabilityAI. “If we started a company in the Bay area in San Francisco, we would just be one of several hundred companies,” Ha said.

In order to attract tech start-ups, the Kishida government is using subsidies, such as offering government-funded computing power to some key companies, including Sakana. It is the same kind of strategy, albeit at a much lower level, that it used to convince global chipmakers such as Taiwan Semiconductor Manufacturing Company to manufacture in Japan. 

“In terms of generative AI, the prime minister has led various efforts on this front so he has met with many key IT leaders and they have set sight on Japan since it has an environment that is suited both from an ease of living and industrially prosperous perspective,” Matsumoto said.

“I think it will be a big benefit for this country’s future for Japan to be at the centre of these technologies including data centres and AI,” he added.

But the push to bring AI companies to Japan has raised alarm among some. Mokume, who heads a volunteer group made up largely of illustrators, said he is hopeful Japan will eventually have the legal system in place to protect its creative industry and the copyright holders. 

Even without revising the existing copyright law, he said more protection can be granted through a stricter interpretation of certain clauses. This includes one that spells out that the exploitation of work for AI development is not permissible “if the action would unreasonably prejudice the interests of the copyright owner in light of the nature or purpose of the work or the circumstance as of its exploitation”. 

“If Japan is going to play a leading global role on this AI issue, then it can’t possibly allow this kind of situation at home,” Mokume said. “In reality, it’s inevitable that overseas AI companies see Japan as a paradise for copyright violation and machine learning since unauthorised learning is continuing no matter how much illustrators are being hurt by generative AI.”