• Nvidia introduced its new AI model Cosmos 3 Edge.
• The company plans to expand physical AI ecosystem in Japan with local partners.
• It will also collaborate with local companies in the healthcare sector.

Nvidia unveiled a new artificial intelligence model for robots and vision AI agents on Wednesday, deepening its push into the physical AI market in Japan.

The company's new model, Cosmos 3 Edge, is a so-called world model, designed to help systems perceive and navigate physical environments in real time. World models are systems that can learn from a wider range of inputs compared with large language models. The rollout follows the launch of Cosmos 3 in May.

The regional expansion takes center stage during Nvidia CEO Jensen Huang's two-day visit to Japan, where the Silicon Valley chip giant is expanding its physical AI footprint by forming a coalition that local industrial giants, including Fujitsu, Hitachi and Kawasaki Heavy Industries, intend to join, according to Nvidia.

"The next frontier of AI is in the physical world, and this is a once-in-a-generation opportunity for Japan," Huang said in a Wednesday statement. "Japan invented modern manufacturing. Now, it has the opportunity to reinvent it for the age of intelligent industries."

The tech giant's partnership with Japanese firms comes just months after Microsoft's $10 billion investment in the country, which aims to build out AI infrastructure and beef up cybersecurity. Japanese investment giant SoftBank has bet heavily on the boom in AI. It's looking to partner with Microsoft and Sakura Internet to develop AI in Japan.

Japan's AI market is expected to reach $27.9 billion by 2029, opening doors for U.S. firms to invest, according to the International Trade Administration. This growth is driven by Tokyo's active push to promote AI adoption across industries, coupled with the eagerness of local firms to forge international partnerships.

Ajay Rajadhyaksha, global chairman of research at Barclays, told CNBC last month that the country holds an advantage in Asia, driven by its diverse AI and clean structural growth stories.

Nvidia's partnership push

Nvidia is also aggressively expanding its AI footprint into Japan's healthcare and biotechnology sectors by extending its reach into agentic AI for advanced sciences through new drug discovery and medical robotics initiatives.

When it comes to agentic AI, Nvidia highlighted the ongoing expansion of Tokyo-1, the AI drug discovery consortium operated by Xeureka, a Mitsui subsidiary. The platform, which has steadily grown since its initial announcement in 2023, is powered by the Nvidia BioNeMo Agent Toolkit, a platform for accelerating autonomous AI drug discovery.

Japan's pharmaceutical heavyweights are already scaling their involvement. Major drugmakers, including Astellas Pharma, Daiichi Sankyo and Ono Pharmaceutical are utilizing Nvidia's specialized biology toolkit to streamline their workflows, the U.S. company said in a blog post.

Beyond biotech, Nvidia said it is making inroads into industrial automation through a partnership with Kawasaki Heavy Industries.