NEW YORK, Jan. 23, 2026, Shares of Google parent Alphabet Inc. (NASDAQ: GOOGL) edged higher in early trading on Thursday following news of its strategic investment in Japanese AI startup Sakana AI. The funding aims to accelerate the deployment of Google’s Gemini chatbot and broaden the company’s footprint in Japan’s enterprise and government sectors.
Google’s investment in Sakana AI, founded in 2023 and backed by a $135 million Series B round last year, gives the startup access to Google’s foundation models. According to Sakana AI CEO David Ha, integrating these models will improve the performance and reliability of the company’s AI products.
The deal signals Google’s intent to deepen its AI presence in Japan, a market traditionally cautious about adopting foreign technologies.Sakana AI has already secured contracts with major Japanese financial institutions, including Mitsubishi UFJ Financial Group and Daiwa Securities.
These agreements focus on developing AI tools for banking and investment operations. Industry analysts say that Google’s support not only enhances the technical capabilities of Sakana’s offerings but also signals confidence to other potential enterprise clients.
Looking ahead, Sakana AI plans closer collaboration with Japan’s Defense Ministry and other government agencies. While regulatory approvals and certification requirements remain unclear, the partnership suggests potential growth in the public sector if the startup meets stringent security and compliance standards.
Experts note that such government-linked initiatives could further elevate Sakana AI’s profile, opening doors for additional funding and strategic partnerships.Beyond Japan, Sakana AI is exploring international expansion, leveraging Google’s expertise to refine its technology for overseas markets.
Exclusive: Google joined Japanese startup Sakana AI’s roster of backers in a move that bolsters chatbot Gemini’s presence in a country eager to speed up AI adoption https://t.co/H0iTX9ij4e
— Bloomberg (@business) January 23, 2026
This move aligns with Google Cloud’s broader strategy of empowering partners to co-develop, co-sell, and scale AI solutions globally. Market watchers suggest that incremental developments in partnerships like these can influence investor sentiment, even if immediate revenue impact remains modest.
Following the announcement, Google shares gained slightly, reflecting investor optimism about the company’s AI strategy and long-term positioning in Japan’s growing tech ecosystem. Analysts caution, however, that short-term stock movements may remain limited, as the operational and regulatory outcomes of Sakana AI’s government collaborations are still uncertain.
Industry observers highlight that Google’s investment in Sakana AI is part of a broader effort to strengthen the Gemini chatbot platform, reinforce enterprise adoption, and test AI integration in sensitive markets. While concrete financial returns may take time, the move positions Google to capitalize on AI-driven growth opportunities both domestically and abroad.
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