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In 1988, Tokyo was destroyed by an apparent nuclear explosion that led to the start of World War III. Thirty-one years later, Neo-Tokyo, a futuristic metropolis built on an artificial island in Tokyo Bay, is troubled by political strife and gang violence. Shotaro Kaneda, and his best friend Tetsuo Shima, lead their motorcycle gang in a war with another gang called the Clowns. One night, as Kaneda and Tetsuo battle a pair of Clowns on a highway, Tetsuo almost runs into a child with wizened features (Takashi) and is injured when his bike suddenly explodes. While Tetsuo and the child are taken away by armed soldiers, Kaneda and the rest of the gang are arrested, believing them to be part of a anti-government Resistance group, but are shortly released. During their interrogation, Kaneda finds Kei, a member of the Resistance, and tries to flirt with her but is snubbed.
Tetsuo, under watch by Colonel Shikishima and Doctor Onishi, is discovered to have mental frequencies similar to "Akira", revealed to be a boy with powerful mental abilities that was the cause of the explosion thirty one years ago. Aware that another gifted child, Kiyoko, has had visions of Neo-Tokyo's destruction in the same manner, the Colonel orders the doctor to kill Tetsuo should the powers manifest any farther. Tetsuo manages to escape and meets up with his girlfriend Kaori, stealing Kaneda's motorcycle. However, they are quickly attacked by Clowns who attempt to sexually assault Kaori, but Kaneda and the rest of the gang show up to defeat them. Before Tetsuo can explain himself to Kaneda, he begins to suffer massive head pains, and a government van quickly arrives to take him away, the soldiers refusing to answer Kaneda's questions. Kaneda happens across Kei, and learns their group is seeking to infiltrate the government hospital where Tetsuo is being held, and quickly joins their cause.
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