Japan's fiscal 2018 budget for artificial intelligence is less than 20 percent of the amount planned by the United States and China, a vast difference that could exacerbate Japan's competitive disadvantage in the field.

According to a tally by Kyodo News, AI-related spending totals ¥77.04 billion ($720 million) in the government's draft budget for the year starting April 1, up some 30 percent from the current year but far short of the approximately ¥500 billion to be spent by the U.S. and the ¥450 billion expected by China.

In the U.S. and China, the public and private sectors are aggressively investing in AI technologies, which are expected to dramatically improve productivity and accelerate innovation.

The government of Prime Minister Shinzo Abe is promoting AI to improve productivity amid an acute labor shortage and a rapidly graying population.

Still, the widening gap in AI-related investment suggests it will be difficult for Tokyo to challenge American dominance in the field.

Japan's private sector invests around ¥600 billion in AI annually, according to government data, but its U.S. counterpart invests more than ¥7 trillion, led by such information technology giants as Amazon.com Inc. and Google Inc. Even in China, which places more importance on the national budget for economic development, private spending on AI is about the same as in Japan.

For the fiscal 2018 budget, the Ministry of Economy, Trade and Industry has earmarked ¥39.3 billion for developing robot-related technologies and AI chips for next-generation computers, while the labor ministry has set aside ¥19.6 billion for applying AI to medical data management and pharmaceutical research.

A senior METI official said it is almost impossible to catch up with the United States in internet-related AI.

"We will seek new opportunities in the improvement of productivity in the manufacturing industry and health care," the official said.