Our Investment in Sakana AI: Pioneering Japan's AI Future

A new dawn is breaking in the land of the rising sun. Japan’s economy and culture are dominant across the globe. Iconic companies like Honda, Sony, Nissan, Nintendo, Uniqlo, Toshiba, and countless others produce a significant portion of the world’s cars, entertainment, clothes, and electronics. The sogo shosha, or Japanese trading corporations, are deeply embedded in global finance, logistics, manufacturing, infrastructure, and natural resources. Most of these corporations trace their roots back to the mid-20th century or earlier, and over the past half century, they have been the destination for the country’s capital and talent and the source of its innovation and influence. However, while these companies have thrived, Japan’s startup ecosystem has been starved of resources.

We believe the pendulum has shifted and the next few decades will see the founding of another cohort of generational and globally dominant Japanese enterprises. A thriving startup ecosystem requires talent, capital, and a rich opportunity set, and we are excited about Japan’s growing potential in each of these areas. Over the past year, we’ve had more than a hundred conversations with Japanese founders and investors. These discussions have made it abundantly clear that top local talent has begun to see startups as a viable and exciting career path. Those who don’t immediately jump into startups often find themselves not at the large conglomerates, but at leading international tech companies and management consulting firms—which can serve as a natural pipeline into startups. This growing talent pool is supported by a growing availability of capital. The capital invested in Japanese startups has grown at a 25% CAGR in the ten years from 2013 to 2023 [1], more than double the growth rate in the US [2]. There is a long runway of growth ahead of us—as a proportion of GDP, Japan’s venture capital investment is almost an order of magnitude smaller than that of other highly developed nations. Overarching all of this is an ambitious plan laid out by the Japanese government to birth 100,000 startups and 100 unicorns and make Japan the largest startup hub in Asia [3]. This has served as a call to action as the nation orchestrates a symphony of activity to reinvent its economy and re-introduce an era of risk-taking not seen for decades.

At this critical juncture in the ecosystem, in the heart of Tokyo, Sakana AI has rapidly emerged as one of Japan’s leading AI startups. Sakana AI was founded on two core premises. Firstly, artificial intelligence will ultimately resemble the way intelligence exists in nature.  The future of AI will mirror our world’s vast diversity of specialized beings. Just as these beings interact with and learn from each other in nature, AI will evolve into a collective intelligence formed by a myriad of specialized models interacting with one another.

Since its founding in 2023, the company has attracted world-class AI researchers from around the world to Tokyo and published novel research results. A notable example is Evolutionary Model Merge, which uses evolutionary algorithms to combine open-source models to produce new domain-specific models in ways that are effective, unintuitive, and non-trivial. Using this approach, they created two best-in-class foundation models for Japan. This R&D philosophy stands in contrast to most others who seek to build large, single, super-intelligent models. The company’s name, Sakana, means “fish” in Japanese. Like the red fish in its logo swimming against the current, Sakana AI boldly charts its own course in AI development.

The company’s second founding premise is that Japan needs a credible sovereign AI ecosystem. We have seen a coalescing of support for the company across Japan’s most influential corporations. Major corporations like Sony, NTT, and KDDI have demonstrated their commitment by investing in the company’s Seed round and offering support from the highest levels. This extends to the Japanese government, which is granting the company access to national data center clusters to conduct research [4]. With this backing, Sakana AI is well positioned to become the provider of choice for domain-specific AI models across Japan’s private and public sectors.

We believe there is no better team to pursue this vision. From our earliest interactions with the founding team, we were struck by their rare combination of unwavering ambition, renowned expertise, and great humility. David Ha was formerly a Research Scientist at Google Brain and before that the Co-Head of Fixed Income Trading in Japan at Goldman Sachs. David’s lifelong passion for evolutionary computation and complexity science forms the bedrock of the company’s innovative R&D approach. Llion Jones is a co-author of the seminal ”Attention is All You Need” paper and a co-inventor of the concept of pre-training at Google. Ren Ito brings a unique blend of startup and public sector experience. As an early employee at Mercari, Japan’s first unicorn startup, he led international operations as CEO of Mercari Europe through their $3.7 billion IPO. Prior to this, he spent 15 years as a Japanese diplomat, representing Japan at the World Bank board and serving as a speechwriter for the former Prime Minister Shinzo Abe. This team has the technical brilliance needed to push the boundaries of AI and the strategic vision and execution capabilities to transform Sakana AI into a formidable player both in Japan and globally.

We are delighted and humbled to co-lead Sakana AI’s Series A funding round alongside existing investors Khosla Ventures and Lux Capital, with participation from NVIDIA.

Sakana AI is hiring exceptional researchers and engineers who are passionate about novel approaches to developing the next generation of AI models. Check out their career opportunities page for more information.