Tokyo-based research company Sakana AI has secured ¥20 billion (approximately $135 million) in Series B funding to accelerate its work on sustainable, efficiency-focused AI technology and expand deployment across major Japanese industries. The round included participation from Mitsubishi UFJ Financial Group, Khosla Ventures, Factorial, Macquarie Capital, Fundomo, Mouro Capital, New Enterprise Associates, Geodesic Capital, Lux Capital, Ora Global, MPower Partners, Shikoku Electric Power, and In-Q-Tel.
The company stated that the new investment supports its mission to develop AI tailored to Japan’s societal needs, while avoiding the unsustainable trajectory of global AI development, which is increasingly driven by massive capital expenditures and soaring energy consumption. Sakana AI has openly questioned whether Japan—a country with limited natural resources—should attempt to compete using the same high-compute approach, arguing instead for AI innovation grounded in efficiency and constraint.
Since its founding, Sakana AI has pursued alternative approaches to AI development, focusing on model evolution, tree-search-based model fusion, self-improving architectures, and energy-efficient systems that can run on edge devices. The company has also made advances in automating parts of AI research through multi-agent LLM systems and introduced new architectures such as the Continuous Thought Machine, the Darwin Gödel Machine, and ShinkaEvolve for evolving LLM-generated programs.
Alongside its research progress, Sakana AI has established a growing enterprise AI business in Japan, collaborating with major corporations to deploy domain-specific applications that deliver measurable ROI. The company said the gap between general-purpose models and specialized professional knowledge remains substantial, and that closing this gap requires deep, domain-specific engineering. It is expanding beyond finance into defense, intelligence, and manufacturing. Sakana AI also emphasized the rising global demand for Sovereign AI and said Japan’s best path lies in post-training optimization rather than large-scale model training.
The Series B capital will support the expansion of both research and applied AI efforts. Funds will be allocated toward advancing frontier R&D in collective intelligence and self-evolving systems, accelerating post-training optimization for Sovereign AI, strengthening applied engineering teams for industry deployments, and pursuing strategic investments and partnerships to build a long-term ecosystem.
KEY QUOTES:
“MUFG has recognized Sakana AI’s world-class technological capabilities from the very beginning, and has deepened our collaboration as a partner in AI implementation. As a business leader myself, I feel a responsibility to lead the implementation of AI across all Japanese companies. Through this investment, I hope the benefits of AI will extend beyond transforming banking operations to Japan’s diverse industries.”
Hironori Kamezawa, President and Group CEO, Mitsubishi UFJ Financial Group
“MPower Partners is excited to back Sakana AI, whose AI technology is helping Japan’s leading enterprises and public institutions tackle their most pressing challenges. Sakana AI’s unique determination to develop frontier AI technology sustainably, through innovation, aligns with our core values as Japan’s first ESG-integrated global VC fund investing in technologies that transform industries and society.”
Kathy Matsui, General Partner, MPower Partners
