SK Telecom is partnering with Japan’s NTT and Taiwan’s Chunghwa Telecom to create an artificial intelligence (AI) fund worth USD 500 million (approximately KRW 767 billion). Leading East Asian telecommunications companies are joining forces to build a joint investment platform and enter the competition for leadership in the global AI ecosystem.

SK Telecom announced at a joint press conference of the three companies held on 10 June at NTT’s head office in Tokyo that they will jointly establish the “Innovative Optical and Wireless Network (IOWN) AI Fund,” which will invest in next-generation AI technologies. IOWN is a next-generation network vision presented by NTT in 2019, based on “photonics-electronics convergence” technology that processes data with light instead of electricity and reduces power consumption to one hundredth. The three companies are understood to have embedded in the fund’s name their determination to resolve the rapidly worsening power shortage at AI data centers through photonics-electronics convergence technology.

To efficiently operate the fund, the three companies decided to establish a fund management company, “Catalight Capital,” which will be based in Silicon Valley in the United States and East Asia. The investment scope spans AI data center infrastructure such as liquid cooling, AI semiconductors including graphic processing units (GPUs), AI services in healthcare, manufacturing and finance, and optical communications, targeting promising startups in North America, Asia and Europe.

NTT stated that around 20 companies, including Sony and Toshiba, have expressed interest in contributing capital, and SK hynix is also preparing to participate. The three companies plan to soon close the first round of investor recruitment and officially launch the fund.

The fund is drawing attention as leading East Asian telecommunications companies are crossing borders to jointly invest in the AI ecosystem. Industry assessments indicate that this cooperation has been driven by the inherent characteristics of the AI industry, where the construction of AI data centers, securing of semiconductors, and advancement of services require capital on a scale that is difficult for a single company to bear. SK Telecom CEO Jung Jae-heon said, “SK Telecom has built an AI ecosystem by making early investments in numerous global AI companies and discovering and nurturing promising startups at home and abroad,” adding, “Based on this successful experience and the competitiveness of the SK Group, we will expand collaborations with AI innovation companies.”

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