What became of the CAM-Brain project in Kyoto? In The Age of Spiritual Machines, Ray Kurzweil mentioned a project at the Advanced Telecommunications Research Lab in Kyoto that was building a brain with a billion artificial neurons. He said that when it was completed, it would be set free to read the internet. 

My initial exploration of this revealed that this project was headed by Hugo de Garis, who apparently retired some years ago now. What was the result of the project? It seems like it never reached the stage envisioned by Kurzweil and I would guess this is due to funding issues, but I’m seeking some kind of confirmation of whether or not this is correct.
Hah! That's funny, I was just looking for information about this project too. However, I was one of the guys involved (in Robokoneko project, more specifically).

No, it wasn't due to funding issues. Explaining what actually went wrong is a bit lengthy process and goes deeply into philosophy of mind, so to put this as short as possible: what do you think could be achieved in terms of understanding human mind by randomly evolving neural networks? If a being was created, fully aware of its existence, would you be able to tell what led to forming its consciousness? Their goals were absolutely pointless. Costly and hopeless, and with no applications.

There is no need to recreate complex natural processes, especially with (still) very basic understanding of brain machinery, if what needs to be done can be achieved with abstract constructs. My criticism of their approach led to denying me PhD studies and broke my career in science in general. On the other hand, in terms of software and engineering a lot of great people were involved.