A screen showing the Atlas simulation environment developed by Ascent Robotics which is trying to create self-driving automobiles capable of handling any real-life driving scenarios. Akio Kon| Bloomberg | Getty Images

On the 11th floor of a building in Tokyo's Shibuya neighborhood, engineers watch a virtual car cruise through a virtual city. When the simulation begins, the car can barely drive in a straight line. As it veers to the left and hits a building, the simulation resets. But within minutes, its artificial intelligence system has learned to negotiate several corners without crashing. Japanese start-up Ascent Robotics wants to create software for self-driving cars and sell it to vehicle-makers and equipment manufacturers. The company, which was founded in 2016, says it raised $18 million in funding this year and aims to complete a fully functional AI vehicle system by late 2020 — when it hopes to hold an initial public offering. The company is catching the attention of Japan's tech community because it counts Ken Kutaragi, the creator of Sony's PlayStation game console, as one of its board members.

Cars that think

On the software side, the company is trying to distinguish itself in the crowded field of AI start-ups with its simulator platform called Atlas. It incorporates PlayStation steering wheels so human drivers can inject unexpected elements into a training simulation such as reckless drivers on the road. It also features sensor data from vehicles, predictive modeling and reinforcement-learning algorithms to help determine which behaviors are most useful for driving. According to Ascent, the result is an AI training environment that can coach the program to quickly learn to drive cars safely. The question is whether simulation data can help make better self-driving cars compared to miles logged in the real world. In July, Alphabet's self-driving unit, Waymo, said its autonomous cars are driving 25,000 miles every day on public roads, and have logged over 8 million miles in total. "The difference between us and Waymo is simply that we are building machines that think like us, and Waymo is building a machine that follows rules," said Fred Almeida, Ascent co-founder and chief architect. "In 2016, what became feasible was the application of new algorithms based on theoretical neuroscience to allow the machine to plan and navigate through a process of reasoning." Vehicles using Ascent's AI system will navigate with low-definition maps and measure distance to objects with sensors such as sonar, radar, cameras and lidar — a light detection and ranging remote sensing method using lasers. The company said the vehicles will recognize their surroundings, make judgments about them and will not require high-definition or three-dimensional maps like systems being developed in the U.S. That theoretically allows them to drive anywhere. "We are not only using AI in perception to make cars drive smarter, but our car uses AI end-to-end, from understanding the environment and planning decisions," said CEO Masayuki (Davey) Ishizaki. "We're using neuroscience and understanding of how the brain works translated into an algorithm which we are using as the foundation of our software. That's going to be the key to make cars drive as though humans were driving them."

An employee wearing a virtual reality headset and using a Sony PlayStation wheel controller to perform maneuvers on virtual simulations on the Ascent Robotics Atlas software. Akio Kon | Bloomberg | Getty Images

PlayStation pedigree

The company has another possible advantage: Kutaragi, who is often referred to as the "Father of PlayStation." Launched in 1994, the gaming console spawned a product line that has sold over 525 million units. Sony's gaming division has been instrumental in solidifying its earnings recovery in recent years. Kutaragi retired in 2011 as president and group chief executive of Sony Computer Entertainment, now called Sony Interactive Entertainment. He has since been involved with several Japanese companies, including his own AI research lab, Cyber Ai Entertainment. "Working with Ascent Robotics is an exciting opportunity because AI technology is evolving quickly now," Kutaragi told CNBC. As a young engineer who joined Sony in 1975, "we watched films like '2001: A Space Odyssey' and it was a very romantic idea of AI but these days it's becoming real," he said. Kutaragi said that, in the 1990s, he wanted to create a new industry by making video games that would appeal to both young people and adults. He said he sees similarities in creating an industry for self-driving vehicles today, in that they'll have to gain mainstream social acceptance. "Current games use many AI engines for generating characters, behavior, physics and other things," Kutaragi noted. "I think we're only at the beginning of seeing AI trying to understand human behavior, hearing conversation, reading documents as a learning system like a baby listening to its mother talking." He said games can generate graphics and sound, "but real AI can act like a sponge and take everything in. In the future, many AIs will communicate with each other over networks."

Ascent Robotics CEO Davey Ishizaki (left) and board member Ken Kutaragi pose with one of the company's self-driving Lexus hybrid SUVs in Tokyo. Tim Hornyak

Souped-up Lexus