TOYOTA Motor and Japan's Nippon Telegraph and Telephone (NTT) will invest 500 billion yen ($3.26 billion) in research and development to create artificial intelligence (AI) software to improve self-driving, Nikkei reported on Tuesday.

The automaker and the Tokyo-headquartered telecommunications major are planning to develop automotive software which will use AI to anticipate accidents and take control of the vehicle, the report said.

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