Subsidy programs can significantly reduce the cost of AI adoption. This Japan-wide guide for SMEs compares the software/SaaS-oriented "Digitalization/AI Adoption Subsidy 2026 (formerly: IT Adoption Subsidy)" and the equipment/innovation-oriented "New Business Expansion / Monozukuri Commerce & Service Subsidy" (formerly: Monozukuri Subsidy) from an AI adoption perspective, covering the application flow and tips to improve your chances of approval. For Chiba Prefecture-specific programs, see our Chiba AI subsidy guide.
- The Digitalization/AI Adoption Subsidy 2026 (formerly: IT Adoption Subsidy): up to ¥4.5M, rate up to 1/2 (up to 4/5 for the invoice category, micro-businesses)
- The Monozukuri Subsidy (New Business Expansion / Monozukuri Commerce & Service Subsidy): the New Business Expansion and Global categories reach up to ¥70M depending on company size (up to ¥90M with the wage-increase special measure); the Innovative New Products/Services category reaches up to ¥25M (up to ¥35M with the special measure); rates range from 1/2 to 2/3 depending on category
- Generative AI tools are not automatically eligible — only AI-function tools registered by a registered IT support provider qualify
- Eligibility, targets and caps vary by requirements; contracting before approval is generally ineligible, and approval is not guaranteed
Which subsidy for AI? (comparison table)
| Aspect | Digitalization/AI Adoption Subsidy 2026 (formerly: IT Adoption Subsidy) |
Monozukuri Subsidy |
|---|---|---|
| Best for | Software, SaaS, AI-OCR, chatbots, workflow automation tools | Innovative product/service development with AI, large equipment + AI productivity investment |
| Cap (indicative) | Up to ¥4.5M (by category) | Up to ¥70M–¥90M depending on category and size (New Business Expansion / Global categories) |
| Rate (indicative) | Up to 1/2 (invoice category, micro-business: up to 4/5) | 1/2–2/3 depending on category (Global category: 2/3) |
| How to apply | Joint application with a registered IT support provider for a registered AI-function tool | Innovative New Products/Services category／New Business Expansion category／Global category |
| Scale | Small-to-medium software investments; relatively streamlined paperwork | Large investments; higher standards for the business plan |
* For the Monozukuri Subsidy: the bracketed cap is the wage-increase special measure; the bracketed rate is the regional minimum-wage-increase special measure — these are two different special measures. See the Monozukuri section below for details.
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🎯 Take the free assessment →Digitalization/AI Adoption Subsidy 2026 (formerly: IT Adoption Subsidy)
From the FY2025 supplementary budget program (2026 application rounds), the former "IT Adoption Subsidy" was renamed the "Digitalization/AI Adoption Subsidy 2026," foregrounding support for AI tools and AI-equipped SaaS as a national subsidy.
| Amount (indicative) | Up to ¥4.5M (by application category) |
|---|---|
| Rate (indicative) | Standard category: up to 1/2 Invoice category (micro-businesses): up to 4/5 * The rate varies by category, type and business size. The 4/5 rate is the maximum for the invoice category / micro-businesses only — not all categories qualify for 4/5. |
| Standard category caps | 1–3 business processes: ¥50K–¥1.5M ／ 4+ processes: ¥1.5M–¥4.5M |
| AI eligibility | Only tools registered and applied for as AI-function tools by a registered IT support provider. Generative AI tools do not qualify automatically. |
| Official site | it-shien.smrj.go.jp (Japanese) |
Using the Monozukuri Subsidy for AI
Full name: "Shinjigyo Shinshutsu / Monozukuri Shogyo Service Hojokin" (New Business Expansion / Monozukuri Commerce & Service Subsidy) — the successor to the former "Monozukuri, Shogyo, Service Seisansei Kojo Sokushin Hojo-kin" (Manufacturing, Commerce, and Service Productivity Improvement Subsidy), still commonly called the "Monozukuri Subsidy." Well-suited for innovative product/service development incorporating AI, and large equipment + AI investments.
| Program name | Shinjigyo Shinshutsu / Monozukuri Shogyo Service Hojokin (Round 1) * Still commonly called the "Monozukuri Subsidy." Successor to the former "Monozukuri, Shogyo, Service Seisansei Kojo Sokushin Hojo-kin" (Round 23), which closed for applications on May 8, 2026. |
|---|---|
| Rate (indicative) | Innovative New Products/Services category: SMEs 1/2 (2/3); micro-businesses/rehabilitation businesses: 2/3 New Business Expansion category: SMEs 1/2 (2/3) Global category: SMEs 2/3 * The bracketed rate applies under the regional minimum-wage-increase special measure — a different special measure from the cap's wage-increase special measure. |
| Main categories (3) | Innovative New Products/Services category／New Business Expansion category／Global category |
| Key eligibility criteria | At least 1 salaried employee / meeting requirements on value-added growth, wage increases and in-house minimum wage levels, etc. (specific numeric thresholds are set in the official call guidelines) |
| AI use cases | Innovative product/service development incorporating AI, equipment + AI productivity investments. Better suited than IT subsidy for larger, equipment-focused investments. |
| Official site | shinjigyou-monodukuri.smrj.go.jp (Japanese) |
Subsidy caps by category and company size (indicative; bracketed figure = with the wage-increase special measure)
| Innovative New Products/Services category (minimum ¥1M) | |
|---|---|
| 1–5 employees | ¥7.5M (¥8.5M) |
| 6–20 employees | ¥10M (¥12.5M) |
| 21–50 employees | ¥15M (¥25M) |
| 51+ employees | ¥25M (¥35M) |
| New Business Expansion category (minimum ¥7.5M) | |
|---|---|
| 1–20 employees | ¥25M (¥30M) |
| 21–50 employees | ¥40M (¥50M) |
| 51–100 employees | ¥55M (¥70M) |
| 101+ employees | ¥70M (¥90M) |
| Global category (minimum ¥7.5M) | |
|---|---|
| 1–20 employees | ¥25M (¥30M) |
| 21–50 employees | ¥40M (¥50M) |
| 51–100 employees | ¥55M (¥70M) |
| 101+ employees | ¥70M (¥90M) |
* The bracketed cap above is the wage-increase special measure; the bracketed rate (in the table above) is the regional minimum-wage-increase special measure — these are two different special measures. Figures are indicative; always check the latest official call guidelines.
Application flow (5 steps)
Using a subsidy for AI adoption roughly follows these 5 steps.
| STEP 1 | Assess current state — identify which tasks AI can help with and estimate the impact. Your AI assessment results can form the foundation of your business plan. |
|---|---|
| STEP 2 | Select eligible tools / projects — for the Digitalization/AI Adoption Subsidy: confirm the tool is registered; for Monozukuri: confirm your project meets the innovation and value-added requirements. |
| STEP 3 | Write the business plan — demonstrate outcomes with numbers, align with policy goals (productivity, wages, DX). Start preparing documents 2–3 months before the deadline. |
| STEP 4 | Apply by the deadline — confirm the latest deadline on the official site and submit on time. |
| STEP 5 | Contract / adopt after approval → results report — as a rule, ordering before approval makes costs ineligible. Receive the subsidy after submitting a results report. |
3 tips to improve approval chances
Plans that quantify outcomes — "current hours → estimated reduction after AI," "projected increase in value-added" — tend to score better. Clearly label estimates as indicative model cases and provide the reasoning behind them.
Explicitly connecting your investment to national goals — productivity improvement, wage growth, DX — is important. Frame what AI will change and how using the program's own keywords.
Vague language like "using AI" is not enough. Describe the specific task, the approach and the expected outcome — e.g., "automate __ invoice entries per month, targeting __ hours saved." Use your free AI assessment results as the basis for your business plan.
know your AI potential in numbers
FAQ
Can AI tools be covered by the Digitalization/AI Adoption Subsidy?
From 2026 the program was renamed the Digitalization/AI Adoption Subsidy 2026, and AI-capable tools are now explicitly eligible. However, only tools registered and applied for as AI-function tools by a registered IT support provider qualify — generative AI tools do not qualify automatically.
Which subsidy should I use — Digitalization/AI Adoption or Monozukuri?
Software- and SaaS-centered adoption (AI-OCR, chatbots, etc.) tends to fit the Digitalization/AI Adoption Subsidy; large investments in equipment plus AI, or developing innovative AI-driven products and services, tend to fit the Monozukuri Subsidy. The right choice depends on your specific investment.
What are the subsidy rates and caps?
The Digitalization/AI Adoption Subsidy covers up to ¥4.5M at up to 1/2 (up to 4/5 for the invoice category, micro-businesses). The Monozukuri Subsidy (New Business Expansion / Monozukuri Commerce & Service Subsidy) can reach up to ¥70M–¥90M depending on category and size (New Business Expansion / Global categories, with the wage-increase special measure), while the Innovative New Products/Services category reaches up to ¥25M (up to ¥35M with the special measure); rates range from 1/2 to 2/3 depending on category — these are indicative figures. Always check the latest official call guidelines for current requirements.
Is approval guaranteed if I apply?
No. Subsidies are awarded through a competitive review, and approval is not guaranteed. Business plans that align with policy goals and demonstrate outcomes with concrete numbers tend to have higher approval rates.
When can I apply? What are the deadlines?
Each program runs multiple rounds with separate deadlines that may change. At the time this article was written, recent rounds may already be closed. Always check the latest round and deadline on each program's official website.
Related:
・Chiba edition: 2026 Subsidies for SMEs in Chiba Adopting AI
・SME AI adoption — where to start? 5 steps
・Custom AI & RAG Development Cost Guide [2026]
・Automate invoice & form entry with AI-OCR | Cost guide & how to start
* Subsidy information is based on each program's latest call guidelines (confirmed August 24, 2026), and is provided for reference only. Amounts, rates, deadlines and requirements may change; always check each program's official site (Digitalization/AI Adoption Subsidy 2026 / Monozukuri Subsidy) for the latest call guidelines (Japanese). We do not guarantee subsidy approval.