• NTT has been developing and promoting the IOWN (innovative optical and wireless network) concept for seven years
• It is eager to make IOWN an established approach to AI networking
• The Japanese giant has established a $500m fund with multiple partners, including SK Group and Chunghwa Telecom to fuel IOWN-related developments

Following years of development and promotion of the innovative optical and wireless network (IOWN) approach to next-generation networking, Japanese giant NTT has gathered a small group of supporters, including SK Telecom’s parent company and Taiwanese telco Chunghwa Telecom, to establish an IOWN AI fund worth up to $500m that will provide seed capital to companies developing IOWN-related technologies. 

NTT believes the IOWN concept – which, by the way, does not feature a new wireless air interface or promote any new cellular technology or standard but instead is focused on photonic connectivity – is suitable for the development of next-generation, energy-efficient compute and network architectures, including those to be deployed in AI factories. The Japanese operator has long promoted the idea and founded the IOWN Global Forum to further develop and attract support for the approach – you can find out more about IOWN and the forum in this TelecomTV interview we conducted last year.   

Now it wants to spread the net further and encourage a broader IOWN ecosystem, and it has plenty of support to do so (more on that later). 

The fund is being established by NTT, SK Group (the parent of SK Telecom, memory chip vendor SK Hynix and others), Chunghwa Telecom, the Development Bank of Japan (DBJ) and Young Sohn, a Silicon Valley-based venture capitalist with experience of the optical and chip tech sectors (he has held various relevant roles, including president and chief strategy officer of Samsung Electronics and CEO of optical chip firm Inphi). Sohn and representatives from the other fund founders will help to “support the global growth of portfolio companies, not only by identifying promising companies and providing capital but also by providing support for technology evaluation, business collaboration, customer access and business development.” 

An investment firm called Catalight Capital will be established as a fund management company with operations in Silicon Valley and Tokyo. “Under a global operating structure, Catalight Capital will identify promising startups and support their growth,” noted NTT.  

The founders believe the shift from AI training to AI inference holds the key to the greater potential use of IOWN technologies. NTT noted:

“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 individualised optimisation. 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 centred on large-scale public datacentres to more distributed architectures that include medium-sized edge datacentres. As constraints on power supply become an increasingly important issue, there is a strong need to realise distributed optical AI datacentres 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 optimising 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.”   

Chunghwa Telecom is already going down this path. It has long been an IOWN collaborator, having activated the world’s first IOWN all-photonics network in 2024. Then earlier this year it unveiled its AI and next-gen infrastructure strategy, including plans to build a distributed AI datacentre (AIDC) infrastructure, a move that would involve integrating its IOWN network with AI compute deployments and engaging in edge AI and pre-6G field trials. 

With all of this in mind, the IOWN AI fund will seek to invest in companies “across multiple stages of growth from early-stage to growth-stage, with a focus on mid-stage companies”. Those companies will be engaged in developments related to the “core areas of IOWN-related technologies,” such as photonics technologies, AI processors and advanced packaging, power optimisation, light source tech (such as lasers) and modulators, and management technology for distributed AI infrastructure, as well as software, AI models and applications and services.

And there are plenty of companies prepared to pump cash into the fund, with more than 20 companies having already expressed an interest in contributing the the fund, including Fujitsu, Furukawa Electric, GlobalFoundries, KDDI, NEC, Samsung, Sony and Toshiba, as well as the founding firms. 

Akira Shimada, president and CEO of NTT, stated: “As the use of AI expands into companies’ core business operations, agentic AI and physical AI, infrastructure centred on inference-driven AI is becoming increasingly important. To realise AI-native infrastructure, it is essential to combine the optical and networking technologies that NTT has cultivated with advanced technologies and the strengths of partners around the world. Through the IOWN AI fund, we will promote business collaboration with promising startups, work together with our global partners to build the IOWN ecosystem, and contribute to the creation of a new industrial foundation.”

- Ray Le Maistre, Editorial Director, TelecomTV