NTT, Inc., SK Group, Chunghwa Telecom Co., Ltd. and Development Bank of Japan Inc. (DBJ) will establish a $500 million IOWN AI Fund aimed at building the IOWN ecosystem and creating new business opportunities through investments in cutting-edge technologies for the artificial intelligence (AI) era.

In connection with the formation of the IOWN AI Fund, Catalight Capital, Inc. will also be established as a fund management company with operations in Silicon Valley and Tokyo, the parties said in a statement on Wednesday.

Under a global operating structure, Catalight Capital will identify promising startups and support their growth.

With operations in Silicon Valley and Tokyo, the fund will secure access to leading-edge technologies and startups in Silicon Valley, one of the world’s foremost innovation hubs.

By leveraging local investment activities and a global network, the fund will promote investments in promising startups primarily in North America, as well as in Asia and Europe.

In addition, by investing in and collaborating with companies across multiple stages of growth from early-stage to growth-stage, with a focus on mid-stage companies, the fund will emphasize support for the practical application and commercialization phases of technologies while consistently promoting the sourcing, real-world deployment, and scaling of advanced technologies.

Through these efforts, the fund aims to enhance AI infrastructure in collaboration with IOWN and expand industrial opportunities through the creation of new services and business models.

To date, the initiative has received interest from various companies in Japan, the United States, and Asia, including companies participating in the IOWN Global Forum and Japanese financial institutions.

The IOWN AI Fund will promote partnerships between investors and portfolio companies, including business development and sales collaboration for services and products.

By combining their respective technologies and capabilities, the fund aims to build a new business ecosystem.

More than 20 companies worldwide have expressed interest in participating as investors to date, and the fund is expected to reach a size of approximately $500 million.

It is noted that in recent years, with the advancement of Physical AI and Agentic AI, the use of AI has been shifting from a focus on training large-scale models to inference applications that require real-time performance and individualized optimization.

As a result, demand for AI infrastructure is expanding beyond hyperscalers to a wide range of industries, including financial institutions and automotive companies.

In line with this trend, AI infrastructure is expected to shift from architectures centered on large-scale public data centers to more distributed architectures that include medium-sized edge data centers.

As constraints on power supply become an increasingly important issue, the parties opined there is a strong need to realize distributed optical AI data centers connected by optical networks that can use computing resources efficiently and flexibly in order to respond to this shift.

Amid this transition, the role of IOWN in optimizing networks, computing, and power in an integrated manner is becoming increasingly important.

Related technologies, including photonics-electronics convergence, are emerging as core growth areas for next-generation AI infrastructure.

The IOWN AI Fund will be established to capture these trends.

Through investments in a broad range of advanced technologies centered on IOWNrelated technologies, including photonics, semiconductors, advanced packaging, power optimization, distributed computing platforms, and AI software and applications, the fund aims to promote the creation of new businesses through the formation of the IOWN ecosystem and to contribute to the development of next-generation AI infrastructure and industrial foundations.

By investing across a wide range of layers from core areas of IOWN-related technologies — such as Photonics Technologies, AI Processors and Advanced Packaging, Light Source and Modulators, and Management technology for distributed AI infrastructure —to software, AI models and inference, and applications and services, and by organically connecting these layers, the fund will seek to build the IOWN ecosystem.

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