The Japanese companies minting money from AI (www.economist.com)

Japanese companies are finding lucrative opportunities in the AI sector, with Ajinomoto leading the way through its production of Ajinomoto Build-up Film (ABF), a key material for insulating AI processors. Originally derived from by-products of monosodium glutamate (MSG) manufacturing, Ajinomoto now commands over 95% of the ABF market. The surge in demand for AI chips has created a scarcity of this critical material, resulting in a remarkable 65% rise in Ajinomoto’s share price this year, significantly outpacing the performance of Japan’s Nikkei index. This trend underscores the rippling impact of AI technology on diverse industries, as companies adapt and innovate around the requirements of AI hardware. As startups innovate and enter this space with new technologies, the growing reliance on materials like ABF raises questions about market stability and potential bottlenecks. The success of companies like Ajinomoto highlights not just the financial potential of AI-related products, but also the complexities and challenges that accompany industry growth.