Taiwan widens $314M AI fund to back offshore startups with roots at home

What's the deal? Taiwan's National Development Fund (NDF)Dealroom has a profile for this one. Try Dealroom → is amending its rules so the government can invest in offshore artificial intelligence (AI) companies whose primary business activities remain in Taiwan. The change targets startups that raise money abroad while keeping operations at home.

The fund: In 2024, the NDF earmarked US$289.5M for the Ministry of Digital AffairsDealroom has a profile for this one. Try Dealroom → to invest in AI startups and the digital economy over 10 years. The program launched last year, allowing seven years for investments and three for divestments.

Why now? The scheme originally backed only Taiwanese startups, but officials found many were raising funds overseas and setting up offshore entities. "This is also a demonstration of Taiwan's power in AI-related industries," said Administration for Digital IndustriesDealroom has a profile for this one. Try Dealroom → Director-General Lin Jiunn-shiow.

Who qualifies? Offshore entities must keep their main business in Taiwan — including research-and-development headquarters, more than 50% of R&D budget, more than 50% of employees, and 50% of revenue tied to Taiwan-based offices, the ministry said.

By the numbers: As of August, 10 AI startups had received funding, with US$7.38M from the NDF and US$16.5M from the private sector. From January to August, the fund invested about US$5.62M in seven startups.

The NDF also works with venture capital firms, accelerators, and corporate investors to co-fund high-potential startups, which Lin said helps them scale and expand internationally.

What's the endgame? One backed firm, Turing DriveDealroom has a profile for this one. Try Dealroom →, began operating autonomous demonstration vehicles in Japan's Miyakojima and Uwajima islands this year, bringing on Japanese firm Tier IV as an investor to expand into Nagoya and Singapore. Another, Linker Vision, joined AT&T, Cisco, and Nvidia in building AI grid infrastructure.

The signal: Taiwan is retooling state capital to keep homegrown AI talent in its orbit even as startups chase global markets — betting that funding offshore structures still counts as investing in Taiwan.

Read more: news.ltn.com.tw

Image credit: EU-Ukraine cooperation