Toyota Motor Corp. said Friday it will create a company specializing in research and development of artificial intelligence in California’s Silicon Valley in January.

Japan’s biggest automaker said it will spend $1 billion (¥120 billion) over the next five years on the firm to be called Toyota Research Institute (TRI) and located in Palo Alto.

“Artificial intelligence has a huge potential to change people’s lives and society from now on,” Toyota President Akio Toyoda told a news conference in Tokyo.

With competition to develop self-driving technology, robotics and AI getting increasingly intense, Toyota’s move is an apparent bid to place itself ahead of the pack.

In September, Toyota announced it will work with Massachusetts Institute of Technology and Stanford University on an artificial intelligence project in which it plans to invest $50 million (¥6.1 billion).

TRI will initially be working on artificial intelligence, big data and robotics to be used for self-driving technology and other mobility-related products.

In the longer term, Toyoda said he expects the TRI’s technologies to be used for other industries.

Toyota Executive Technical Adviser Gill Pratt, a former MIT professor, will serve as CEO of the TRI.

Pratt, who was also program manager at DARPA, which is an R&D body under the U.S. Department of Defense, said the new company will hire about 200 people over the next several years.

Asked if Toyota can compete with rivals such as Google in this field, Pratt said that manufacturing sophisticated self-driving vehicles is an extremely difficult challenge, and that competition now is at a very early stage, indicating Toyota has a good chance of success.

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