Nvidia’s next big bet is Robotics: Will Japan lead that revolution?

Japan might have lost the first war of AI, but when it comes to robotics, no one has managed to outpace their expertise.

Please note: This analysis is for informational purposes only and is not intended as investment advice. Mention of specific stocks is not a recommendation to buy or sell any securities.

There’s a reason Nvidia’s Deepu Talla, VP of robotics, is practically pounding the table about physical AI and robotics hitting their “ChatGPT moment.”

As we all know by now, ChatGPT set the world on fire with generative text and made AI a household name overnight. But sadly for Japan, generative AI in software is largely the domain of American and Chinese giants.

Japanese companies have struggled to capture much of the software-driven windfall from LLMs and ChatGPT clones. That’s because it requires formidable compute infrastructure and machine-learning prowess, arenas historically dominated by the West and, increasingly, China.

But robotics? That’s an entirely different story…

Japan is the world´s number one industrial robot manufacturer – delivering 45% of the global supply. In fact, recent years, the country's robot suppliers have increased their production capacity considerably: Their export ratio rose to 78% in 2020, when 136,069 industrial robots were shipped. This is the sector where Japanese engineering brilliance is so strong that China or even the US has struggled to compete.

With Nvidia proclaiming that physical AI (robots that can see, hear, think, and act) is on the cusp of exponential growth, Japan’s industrial robotics giants are suddenly looking a heck of a lot more interesting.

Because of this, I am looking at three of Japan’s most compelling robotics players, and how I think they will ride this AI-driven robotics boom. I’ll walk you through how each is positioned, where they shine from a fundamentals standpoint, and whether their valuations scream overpriced hype or underrated winner: