Military Police and welfare workers who raided a condominium in Bangkok found the babies, aged one month to six months old, with nine Thai and Japanese child-minders and a woman who was about four months pregnant, Thai media reported.
The woman claimed to be a surrogate mother.
A Thai lawyer acting for the Japanese man says the millionaire is father of all the children.
Thairath TV journalists working undercover discovered the condominium in the Lat Phrao area in central Bangkok only days after Australia's Fairfax Media revealed the plight of Gammy, a six-month-old baby with Down syndrome who was left with his Thai surrogate mother by his Australian biological parents.
The case caused a furore in Thailand and Australia, and prompted Thai authorities to intensify a crackdown on the booming Thailand surrogacy industry.
The nine babies have been taken to an orphanage where DNA tests are to be made.
'''The Japanese father loves his babies and comes to visit them every week,''' said the lawyer Ratprathan Tulathorn. He added that the man plans to try to sue to have his children returned.
Thairath reporters were told by people living near the condominium: '''it is very noisy. We heard babies cry. It has been over a year, but we still hear babies cry.'''
The reporters said two of the babies were taken to hospital last week suffering fevers. They said four of the babies were found sleeping on beds in one room and the others were in different rooms.
A woman at the condominium said nannies were paid to care for the babies. A Japanese woman questioned said she was expecting to accompany the babies to Japan.
The Director of Phuket Public Health, Dr Kajomsak Keawjarat, said today that Phuket had seven hospitals but none of them had a program for artificial insemination.