Japan's Defense Ministry Seeks $55.6B Budget for AI, Drones and Hypersonic Missiles

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Japan's Defense Ministry unveiled an 8.9 trillion yen ($55.6 billion) budget request featuring AI-powered command systems, attack drones, and hypersonic missiles. The plan aims to modernize defense capabilities amid regional tensions with China, though experts warn Japan's drone market dependence on Chinese imports poses challenges.

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Japan Defense Budget Request Signals Major Technology Shift

Japan's Defense Ministry disclosed an 8.9 trillion yen ($55.6 billion) budget request for the coming fiscal year, marking a strategic pivot toward artificial intelligence, drones, and advanced missile systems

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. The preliminary figure represents only a modest increase from the current fiscal year's 8.8 trillion yen ($55 billion) request, but officials expect the final amount to grow substantially once Prime Minister Sanae Takaichi's government approves new security and defense strategies later this year

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. This request concludes a five-year, 43 trillion yen plan that has doubled Japan's defense spending to approximately 2% of gross domestic product

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New Ways of Warfare Drive Defense Modernization

The Defense Ministry structured its budget request around three core pillars: preparing for new ways of warfare through AI and drones, ensuring sustained operational capabilities during prolonged conflicts, and strengthening defense industrial base

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. Japan now aims to drastically strengthen its deterrence and response capability by transforming its defense capability, adapting to modern warfare tactics observed in Ukraine's deployment of drones

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. The ministry emphasizes that these new approaches require domestic development and mass-production of low-cost uncrewed weapons to reduce costs, minimize casualties, and build a more cost-efficient air defense network

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Drones and Missiles Enhance Counterstrike Capabilities

The ministry plans to deploy attack drones in coordination with long-range missiles for more cost-effective counterstrikes

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. For the fiscal year beginning in April 2027, funding will support acquiring unmanned attack drones capable of launching from above or underwater

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. Officials note that uncrewed weapons could help Japan compensate for falling military personnel numbers as its population ages and shrinks

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. However, experts warn that developing fully homemade drones presents challenges given Japan's commercial market is dominated by imports from China

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. To further strengthen counterstrike capabilities, the ministry seeks to develop hypersonic missiles that can be launched from submarines

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AI in Command and Control Systems

The Defense Ministry plans to introduce an integrated artificial intelligence platform in command and control to improve speed and accuracy in decision-making, including assessing battlefields and choosing targets

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. Japan is considering using existing foreign AI technologies, including those from the United States, while simultaneously developing and strengthening domestically developed AI, or combining both approaches

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. The ministry seeks to build a next-generation platform called an AI orchestrator, which would integrate and use multiple AI systems while ensuring autonomous selection and operation

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. Additionally, plans include building a Defense Ministry cloud for highly sensitive data transmission and stable communications networks during emergencies or disasters

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Strengthening Defense Industrial Base Amid Supply Chain Risks

The ministry has requested unspecified funding for a state-owned, contractor-operated system to ensure stable defense equipment production and supplies, with the government acquiring factories and outsourcing manufacturing to private firms

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. This addresses concerns about supply chain risks from suppliers withdrawing from the defense sector

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. The budget request also includes funding to support companies' defense-related research and development or restructuring to strengthen production and efficiency

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. While profits at major suppliers such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries and IHI Corp. have risen as Japan builds up its military and expands arms exports, the industry lags overall due to constitutional limits on the use of force for only self-defense

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. Dozens of companies have withdrawn over past decades due to poor profits, uncertain business outlook, and concerns about reputational harm from making arms, especially lethal weapons

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Regional Tensions Shape Five-Year Defense Strategy

Under its five-year defense strategy set in 2022, Japan has doubled its defense spending to build up its Self-Defense Forces' offensive role to counter China's growing assertiveness

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. Beijing has criticized Japan's defense buildup as "new militarism"

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. Japan has fortified its southwestern region with longer range missiles and interceptors in recent years

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. Watch for the final budget figures after Prime Minister Takaichi's government completes its security and defense strategy review, as the 8.9 trillion yen request is widely expected to increase substantially. The success of Japan's AI orchestrator platform and domestic drone production capabilities will determine whether the country can effectively modernize defense capabilities while reducing dependence on foreign suppliers.

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