TM Toyota Motor Corporation

Toyota Motor Corp. is investing $1 billion over five years to establish a new artificial intelligence and robotics research company, the world's biggest auto maker said Friday.

The company, called Toyota Research Institute, will be based in Silicon Valley and will be headed by Gill Pratt, who worked at the U.S. defense department's robotics arm and joined Toyota earlier this year, Toyota said.

Toyota's investment is the latest sign of the merging paths of Silicon Valley and the automotive sector. As cars become increasingly controlled by software, new players like Google are entering the sector with self-driving technologies, while many auto makers have been setting up arms in Silicon Valley in an effort to grasp the latest software and robotics trends.

The investment also underscores Toyota's ample cash hoard as it expects to post record profit this year, fueled by a weaker yen.

The company will focus on research and development on artificial intelligence and robotics that could be applied in cars, such as autonomous driving and safety technologies that would help drivers or encourage senior citizens to continue driving, Mr. Pratt said.

Toyota President Akio Toyoda said the activities of the new company could also allow Toyota to explore new fields of business.

"This is the first small step that allows us to go beyond automobiles and make use of the Toyota group's potential by utilizing artificial intelligence," he told a news conference.

Write to Yoko Kubota at yoko.kubota@wsj.com

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(END) Dow Jones Newswires

November 06, 2015 01:45 ET (06:45 GMT)

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