As U.S. giants like Google, OpenAI and Anthropic race to develop the big language fashions that underpin their AI merchandise, startups similar to Sakana AI, Mistral AI, DeepSeek and AI21 Labs are carving out their very own area of interest with specialised fashions designed for particular areas, industries, or distinctive options.

In pursuit of that purpose, Tokyo-based Sakana AI has closed a ¥20 billion (roughly $135 million) Sequence B funding spherical, which values the corporate at $2.65 billion post-money, up from a pre-money valuation of $2.5 billion, CEO David Ha advised TechCrunch.

Based in 2023 by former Google researchers Llion Jones, Ren Ito and Ha, Sakana AI makes inexpensive generative AI fashions that work effectively with small datasets and are optimized for the Japanese language and tradition.

The Sequence B spherical drew a mixture of new and returning traders, combining Japan’s monetary heavyweights like Mitsubishi UFJ Monetary Group (MUFG) with international enterprise gamers similar to Khosla Ventures, Macquarie Capital, NEA, Lux Capital and In-Q-Tel (IQT).

“We plan to deploy the brand new capital for not solely R&D, together with [AI] mannequin improvement, but in addition to increase our workforce for engineering, gross sales, and distribution groups in Japan,” Ha stated. This yr, Sakana has expanded its presence in Japan, teaming up with main native enterprises, together with Daiwa and MUFG, and growing AI options.

Ha, who beforehand led analysis at Stability AI and labored at Google and Goldman Sachs, additionally stated Sakana plans to increase its enterprise enterprise past finance into the economic, manufacturing, and authorities sectors in 2026.

Wanting forward, the corporate is eyeing the protection, intelligence and manufacturing sectors. The 2-year-old startup additionally stated it is going to be “actively pursuing strategic funding, partnerships and M&A for long-term international progress.

Sakana says it sees robust international demand for sovereign AI options that mirror “nationwide cultures and values.” The Japanese startup added that focusing its R&D efforts on AI merchandise after LLMs are educated helps it effectively construct superior fashions tailor-made to Japan, taking a path distinct from the large-scale AI mannequin race.

This funding spherical comes roughly a yr after the corporate’s Sequence A spherical, wherein it raised about ¥30 billion ($214 million) at a $1.5 billion valuation. Sakana had raised roughly $244 million in whole as of March 2025, in response to PitchBook, so this spherical would take that whole to about $379 million.