NTT announced Wednesday it will establish a global investment fund with South Korea's SK Telecom and Taiwan's Chunghwa Telecom to commercialize IOWN [1].
The partnership targets a critical bottleneck in artificial intelligence development by replacing traditional electronic signals with light-based communication. This shift aims to provide the high-speed, high-capacity infrastructure required for next-generation AI while reducing the massive energy demands of modern data centers [2].
The fund is expected to reach approximately 80 billion Japanese yen, or about 500 million U.S. dollars [1]. The partners intend to have the fund established by the end of June 2026 [1]. While the partnership involves three East Asian telecommunications giants, the fund's operations will be centered in Silicon Valley [1].
IOWN, or Innovative Optical and Wireless Network, is designed to integrate optical technology across the entire network. A spokesperson for NTT said the platform is characterized by its ability to maintain high speeds and large capacities while significantly suppressing power consumption [2].
NTT President Shimada said that promoting business creation through investment is indispensable for next-generation AI infrastructure [3]. The collaboration between Japan, South Korea, and Taiwan marks a strategic alignment of regional tech leaders to compete in the global race for efficient computing hardware.
By focusing on optical communication, the trio seeks to bypass the physical limits of electricity-based chips, which generate heat and consume vast amounts of power when processing AI workloads. The Silicon Valley hub will allow the fund to engage directly with the ecosystem of semiconductor startups, and software developers driving the AI revolution [1].
“The fund is expected to reach approximately 80 billion Japanese yen, or about 500 million U.S. dollars.”
This alliance signals a shift toward 'all-photonics' networking as a solution to the energy crisis facing the AI industry. By pooling resources from three of Asia's largest telcos and basing operations in Silicon Valley, NTT is attempting to standardize IOWN as the global backbone for AI, potentially reducing the industry's reliance on traditional copper-based electronic interconnects that limit scaling and increase heat.
