Express Update | OpenAI’s Japanese Rival Sakana in Talks for Funding at $2.5 Billion Valuation
Sakana AI: Japanese AI Startup Targets $100M Funding at $2.5B Valuation
Image source: Sakana
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Tokyo-based AI developer Sakana AI is in advanced talks with investors from the United States and Japan to raise $100 million at a $2.5 billion valuation — a 66% increase from its funding round just one year ago, according to two sources familiar with the matter.
Profitability Target & Unique Approach
- CEO David Ha previously pledged that the company would operate profitably within a year.
- Unlike OpenAI, Anthropic, and Google, Sakana’s R&D strategy takes a different technical path.
- Earlier in the year, Sakana announced AI development partnerships with major Japanese financial institutions.
Upon closing, Sakana’s valuation is expected to reach $2.6 billion. Funds will be used to expand engineering and sales distribution teams. The company currently employs ~70 staff.
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Regional AI Strategies
Sakana is part of a new wave of regional AI developers — such as France’s Mistral AI and India’s Krutrim — that create AI systems tailored to local languages and culture. These strategies help reduce dependency on U.S. and Chinese AI technology.
Backing & Funding
Investor base in Japan:
- Three largest commercial banks
- Tech giants: Fujitsu, NEC
- Trading house: Itochu Corporation
- Telecom: KDDI
Other support:
- Japanese government subsidies for AI training compute
- $230 million cumulative equity funding
- U.S. VCs: NEA, Khosla Ventures, Lux Capital
- Nvidia also holds a stake.
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Competitive Pressure
U.S. AI companies are expanding into Japan aggressively:
- OpenAI × SoftBank partnership:
- SoftBank to invest $3B annually in OpenAI tech for subsidiaries including Arm and PayPay
- Joint venture to sell OpenAI’s Cristal Intelligence toolkit exclusively in Japan
- OpenAI opened Japan office in April 2024
- Anthropic: Appointed Japan country manager in August; opening Tokyo branch
- Cohere: Hired Japan GM in August
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Founders & Research Pedigree
Founded in 2023 by:
- David Ha — Former Google researcher
- Llion Jones — Co-author of Google’s Transformer architecture paper (the backbone of LLMs like GPT and Gemini)
Ha’s goal: Build a “Japanese DeepMind.”
Sakana’s approach seeks to move beyond Transformers, inspired by nature and evolution.
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Innovation Example: ShinkaEvolve
Last month, Sakana released:
- ShinkaEvolve — An open-source tool that merges LLMs with evolutionary algorithms
- Generates multiple possible solutions to a problem and filters for the most promising
- Claimed to be more efficient and better at creative problem-solving than traditional Transformer models
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Commercial Partnerships
2024 strategic deals:
- May — Multi-year AI partnership with Mitsubishi UFJ Financial Group (Japan’s largest bank)
- October — Similar deal with Daiwa Securities Group (one of Japan’s largest brokerages)
Following the MUFG agreement, Ha told Bloomberg the company could reach profitability within a year.
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