The Japanese government is teaming up with businesses and academia to set up hospitals enhanced by artificial intelligence (AI). Participants will develop AI-assisted programmes that will automatically enter information into patients' medical records and also analyse blood tests. The government is expected to invest more than USD100mn over the next five years, with a target of establishing 10 model hospitals by the end of fiscal year 2022. The main aim is for the government to address structural challenges in healthcare in Japan, including the shortfall of medical personnel and rising medical expenses. Implications: We believe that Japanese medical device manufacturers will aspire to develop more advanced equipment that can be used in these modern hospitals.