NTT, SK Group and Chunghwa Telecom Launch $500M Fund for AI Infrastructure Based on Photonics Technology

NTT, SK Group, and Chunghwa Telecom have launched the $500M IOWN AI Fund to develop AI infrastructure based on photonics technology. The fund aims to commercialize the Innovative Optical and Wireless Network (IOWN) architecture, which reduces the high energy consumption of AI workloads by using light instead of electrons for data transport. This initiative represents a strategic effort by telecom operators to counter the dominance of hyperscalers in the AI era.

IOWN AI Fund launch

• ▪The new fund is named the IOWN AI Fund and is managed by the newly-incorporated IOWN Global Capital.
• ▪NTT, SK Group, and Chunghwa Telecom have launched a $500 million fund for AI infrastructure based on photonics technology.
• ▪The IOWN AI Fund will invest in companies developing on the Innovative Optical and Wireless Network (IOWN) framework.
• ▪The Development Bank of Japan's participation suggests the IOWN initiative is being treated as a priority piece of national infrastructure.

IOWN photonics architecture

• ▪The All-Photonics Network (APN) keeps data in optical form from the network core to the terminal device, reducing latency and energy use.
• ▪NTT holds the intellectual property for the IOWN architecture and created the IOWN Global Forum as its standards body.
• ▪The Innovative Optical and Wireless Network (IOWN) framework has three pillars: the All-Photonics Network (APN), Digital Twin Computing (DTC), and the Cognitive Foundation.

Operational energy efficiency

• ▪The growth of AI models and data traffic is creating unsustainable pressure on power grids and existing network infrastructure.
• ▪Optical components transmit data using a fraction of the energy consumed by electronic equivalents.
• ▪Current data centers, with their electronic switches and processors, are a significant source of performance bottlenecks and energy consumption.

Enterprise AI applications

• ▪IOWN's low-latency network is designed to make applications like telesurgery, remote industrial robotics, and autonomous vehicle control technically feasible.
• ▪The Cognitive Foundation enables enterprises to provision programmable, autonomous network slices with guaranteed performance characteristics.

Telco-hyperscaler competition

• ▪The IOWN consortium aims to create a value proposition that hyperscalers cannot replicate merely by purchasing bandwidth.
• ▪The IOWN AI Fund is a strategic effort by telecom operators to counter the dominance of hyperscalers in the AI sector.
• ▪During the cloud era, telcos were largely confined to providing physical infrastructure while hyperscalers captured value from overlying services.

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