Anime Is Japan’s Next Global Champion

Move over, Marvel. The next blockbuster entertainment franchise might come from Japan.

Anime is shaping up as the country’s next big export industry, beyond cars and electronics. This once-niche entertainment form is entering the worldwide mainstream , and its growth could light up investors’ portfolios.

The global market for Japanese animation, known as anime, and its related products has more than doubled between 2012 and 2022 to 2.9 trillion yen, equivalent to $20 billion, according to the Association of Japanese Animations. The overseas market has been driving that growth. Markets outside of Japan made up around half of the total in 2022, compared with around 18% a decade earlier.

Streaming companies such as Netflix are certainly taking notice. Its live-action series “One Piece,” based on a Japanese comic, was its most-watched show in the second half of 2023. In fact, anime content on Netflix in the period logged 14% viewing growth from the first half of 2023, compared with a 4% drop overall, according to Jefferies. These streaming platforms will continue to introduce more anime-related content to their global audiences.

Japan’s anime and manga, the Japanese word for comics, have created many well-known characters and franchises over the years, such as Pokémon. And it looks to be getting even more mainstream. The anime market in North America has grown from $1.6 billion in 2018 to $4 billion this year, according to Jefferies. And Asia, which has long been more receptive to anime, will likely continue to grow strongly, especially in China. Anime has also been popular on Chinese streaming platforms such as Bilibili .

Apart from streaming, selling merchandise can be even more lucrative. Sanrio , which owns characters like Hello Kitty , has reported record profits, with its share price rising nearly sixfold over the past five years.

Sony would be another major beneficiary of this trend . The company owns animation streaming service Crunchyroll, which had 15 million subscribers as of June. That compared with around 3 million subscribers when Sony announced the acquisition of the streaming service from AT&T for nearly $1.2 billion in 2020. This contrasts with Sony’s approach in online streaming for other content: It acts more like an “arms dealer,” selling movies and shows to platforms such as Netflix and Amazon.com . That means the company could benefit more directly from the anime boom. And anime also has strong synergies with its movie and game businesses .

Anime maker Toei Animation, which owns popular franchises such as “One Piece” and “Dragon Ball,” is another listed company that would benefit. It makes anime itself, but more important for the overseas markets, it also earns licensing revenue from the copyrights to popular franchises that it owns. Sales outside of Japan accounted for more than half of its total revenue in the latest fiscal year ended in March. Season two for Netflix’s “One Piece” is already in production. Toei stock has nearly tripled since the end of 2019.

Anime has blockbuster potential, not just for audiences but for investors as well.

A sharp technology sell-off has exposed a new anxiety on global markets: whether the enormous borrowing behind the artificial-intelligence infrastructure boom can generate sufficient returns as interest rates rise and Chinese competition intensifies.

The artificial-intelligence investment boom has powered technology shares, semiconductor manufacturers and data-centre operators to extraordinary heights. Last week, investors were given a reminder that much of this expansion is being built with borrowed money.

The technology-heavy Nasdaq Composite fell 4.5 per cent over the week ended October 16, its weakest performance since late June. Semiconductor shares suffered an even deeper correction, with the Philadelphia Semiconductor Index losing about 11.4 per cent.

The selling spread quickly through global markets. Micron Technology fell 14.6 per cent over the week, while South Korea’s Samsung Electronics and SK Hynix dropped approximately 18 per cent and 24 per cent respectively.

This was more than a routine bout of profit-taking. Investors were reassessing three interconnected risks: higher interest rates, the rapidly expanding debt burden attached to AI infrastructure and the prospect of stronger competition from Chinese memory-chip manufacturers.

The debt behind the AI build-out

Artificial intelligence requires a physical infrastructure network of enormous scale. Data centres must be built, advanced processors purchased, power supplies secured and cooling systems installed before customers begin generating meaningful revenue from them.

Technology companies are increasingly supplementing their own cash with corporate bonds, syndicated loans, equipment leases, private credit and project-level financing.

JPMorgan describes the emerging funding model as a combination of conventional corporate borrowing and project finance tied to individual data-centre assets. In Australia, the Reserve Bank estimates that syndicated loans accounted for approximately three-quarters of data-centre financing during 2025 and 2026 to date.

The numbers are becoming large enough to affect broader credit markets. The Federal Reserve Bank of Dallas has cited Wall Street estimates suggesting AI-related investment-grade bond issuance could approach US$300 billion in 2026 alone.

That borrowing is not automatically problematic. Debt can be an efficient way to finance long-lived infrastructure when future revenue is sufficiently predictable. The concern is that AI technology, customer demand and computing economics are changing much faster than the repayment schedules attached to the assets.

A data centre financed today may carry debt for years. Investors must therefore make assumptions about future utilisation rates, electricity prices, chip performance, customer concentration and the amount businesses will ultimately pay for AI computing.

When interest rates rise, those assumptions become less forgiving.

Inflation changes the calculation

September’s US inflation data intensified the pressure. Consumer prices increased 3.7 per cent over the year, ahead of market expectations and up from 3.4 per cent in August.

The hotter reading reduced confidence that interest rates would fall quickly and pushed bond yields higher. That matters particularly for companies whose valuations depend on profits expected well into the future, as well as highly leveraged infrastructure operators that may need to refinance.

CoreWeave has emerged as a closely watched test case. The specialist cloud-computing company has accumulated substantial debt and lease obligations to build AI capacity, while relying on a concentrated group of large technology customers.

Its shares fell sharply during the sell-off, while the cost of insuring its debt against default climbed. CoreWeave has argued that its contracted backlog more than covers its obligations and that financial markets do not always understand its business model. Nevertheless, its securities have become a proxy for investor confidence in debt-funded AI infrastructure.

Oracle, another major investor in AI computing capacity, fell 8.8 per cent in Friday trading, while CoreWeave dropped 15.5 per cent.

The question is shifting from how much AI infrastructure can be built to how profitably it can be operated.

China adds another source of pressure

Interest rates were not the only catalyst. Reports of advances by Chinese memory-chip producer ChangXin Memory Technologies raised concerns that lower-cost Chinese products could increase competition across the global semiconductor industry.

Memory chips are essential to AI systems, but the industry is historically cyclical. Periods of tight supply and high pricing can encourage rapid investment, eventually producing oversupply and falling margins.

The prospect of a well-funded Chinese competitor expanding its technological capabilities unsettled investors in Samsung, SK Hynix and Micron. It also demonstrated that AI-related demand does not insulate chipmakers from conventional competitive pressures.

That combination—slower rate cuts, more expensive financing and potentially cheaper supply—challenged the assumption that every company exposed to AI would enjoy continually expanding margins.

A reset rather than the end of the boom

The sell-off does not establish that the AI boom is ending. Demand for computing power remains strong, the largest technology companies continue to generate formidable cash flows and many infrastructure projects are backed by long-term customer contracts.

What has changed is the market’s willingness to overlook the price and financing structure of that growth.

The most resilient companies are likely to be those able to fund investment from operating cash flow, secure long-duration customers and demonstrate that new capacity will earn returns comfortably above its financing costs.

More speculative operators may face greater scrutiny, particularly where debt is expensive, customers are concentrated or expected revenue depends on demand that has not yet materialised.

For Australian investors, the lesson extends beyond US technology shares. Local data-centre operators, infrastructure funds, electricity suppliers and property groups are increasingly exposed to the same investment cycle.

Artificial intelligence may remain one of the defining growth themes of the decade. But last week’s correction showed that enthusiasm for the technology does not eliminate financial discipline.

The next stage of the AI boom will be judged not only by computing power, model performance or demand for chips, but by something more traditional: whether the assets being financed can generate enough cash to repay the money borrowed to build them.

Fact box

Nasdaq Composite: Down 4.5 per cent for the week ended October 16, 2026

Philadelphia Semiconductor Index: Down approximately 11.4 per cent

Micron Technology: Down approximately 14.6 per cent

Samsung Electronics: Down approximately 18 per cent

SK Hynix: Down approximately 24 per cent

US September inflation: 3.7 per cent annually

Estimated 2026 AI-related investment-grade issuance: Approximately US$300 billion