Sakana AI has signed a ?5 billion ($34 million) deal with Mitsubishi UFJ Financial Group (MUFG) to automate the creation of banking documents, including credit approval memos, the companies announced Monday.

¡°We are very happy to take on the meaningful challenge of revolutionizing banking ¡ª a core domain of society ¡ª with MUFG,¡± said Ren Ito, the Japanese artificial intelligence startup¡¯s cofounder and chief operating officer.

A six-month pilot phase begins in July, when MUFG¡¯s banking subsidiary will start generating documents using Sakana AI¡¯s The AI Scientist, ¡°a fully AI-driven system¡± that was originally designed for automating scientific discovery, including manuscript writing and peer review.

Ito, who has been retained as AI adviser to MUFG Bank, will provide advice on AI implementation strategies for the duration of the deal, which will last ¡°more than three years,¡± according to a press statement from both companies.

Tokyo-based Sakana AI spent six months tailoring its systems to meet the needs of Japan¡¯s financial institutions.

¡°We are paying attention to the finance industry as an area poised for generating significant value with the use of AI,¡± the company said in the press release.

Large language models and AI agents alone do not have much value as commodities, Ito said.

ChatGPT is useful, he added, but much more can and needs to be done.

¡°We decided to make a turnkey solution for banks,¡± he said.

Looking ahead, Ito said that the partnership faces some challenges, such as figuring out what lies beyond increased efficiency and productivity.

He said that the banking subsidiary of MUFG will be able to write credit memos more quickly with the technology provided by Sakana AI, but lending decisions are another matter altogether.

¡°As for who it can loan money to, that¡¯s a question beyond efficiency and beyond productivity,¡± said Ito.

Sakana AI, founded by CEO David Ha in 2023, became the fastest unlisted startup in Japan to achieve a valuation of $1 billion.

It has raised about ?30 billion from a range of investors, including MUFG Bank, Sumitomo Mitsui Banking, Mizuho Financial Group and Nvidia.

MUFG¡¯s medium-term business plan, which was published in April 2024, prioritizes the use of AI and the improvement of data infrastructure.

MUFG Bank, which is a consolidated subsidiary of the financial group of the same name, is the largest bank in Japan by assets.