New Government Policy Shows Japan Favors a Light Touch for AI Regulation
This report is written by Hiroki Habuka for Center for Strategic and International Studies.
In early 2024, it seemed clear among the major developed economies that significant new regulatory frameworks for artificial intelligence (AI) were imminent. In the United States, the Biden administration had passed a sweeping AI executive order in October 2023, and congressional leaders were working toward comprehensive AI legislation for 2024. Meanwhile, the European Union was preparing to pass the EU AI Act, which it ultimately did in May 2024.
Japan was also a participant in this prevailing trend. Two key publications from the first half of 2024 strongly signaled that Japan was heading toward new legislation aimed to more comprehensively regulate AI technology: in February, a concept paper from the ruling Liberal Democratic Party, and in May, a white paper by the Japanese Cabinet Office’s AI Strategy team. Both documents recommended the introduction of new regulations for large-scale foundational models. All signs suggested that Japan was moving in parallel with its allies toward establishing a strengthened regulatory structure for AI.
By the end of 2024, however, the prospects for tough AI regulation in the United States and Europe had changed significantly. Not only did the United States never pass AI legislation, but also U.S. voters reelected President Donald Trump, who fulfilled a campaign promise to repeal the Biden administration’s AI executive order on the first day of his second term in office. The European Union, for its part, is still working to implement the AI Act, but influential documents such as the Draghi report on EU competitiveness suggest widespread concerns in the European Union that its AI regulatory efforts may have gone too far and stifled innovation. These concerns have been carried forward in the European Commission’s white paper “A Competitiveness Compass for the EU,” which emphasizes the necessity of achieving simpler, lighter, and faster regulation. At the AI Action Summit, EU President Ursula von der Leyen committed to reducing bureaucratic hurdles. Meanwhile, the French government is reportedly working to ensure that implementation of the AI Act is more focused on promoting innovation and less focused on regulating potential harms than drafters of the legislation anticipated.
Japan, like its U.S. and EU allies, is hitting the brakes on the race to regulate AI. On February 4, 2025, the Japanese government’s Cabinet Office released the interim report of its AI Policy Study Group (henceforth “the Interim Report,” or “the Report”), which outlined a very different vision for AI regulation than the country’s two reports from the first half of the previous year. This CSIS white paper outlines the direction of Japan’s AI regulatory approach in 2025, based on the contents of the Interim Report, while also incorporating Japan’s response to the so-called DeepSeek Shock.
Please click on this link to read the full report.
Image credit: Photo by Manuel Cosentino on Unsplash