These include AI processors, which are chips designed to handle AI tasks. While Nvidia is the leading designer of AI processors, the physical manufacturing of these chips is outsourced primarily to Taiwan. These chips provide the ultra-fast memory that AI processors rely on to train and run increasingly sophisticated models. Seoul has also actively courted global AI leaders and chip designers. Japan’s government has announced a target of US$65 billion of investment by its public and private sectors in physical AI by 2040.