• KDDI is looking to spearhead AI and digital transformation developments
• The telco has made several acquisition efforts in Japan
• It has agreed to buy a majority stake in AI startup Elyza for the “social implementation” of GenAI
• The operator also plans to take over an electronic ticket platform to help with its entertainment sector digital services push

Japanese telco KDDI has unveiled several acquisitions aimed at enhancing its position in the generative AI (GenAI) realm, as well as to advance its digital services portfolio.

The operator released separate statements (in Japanese) to announce the moves, with the first one involving the formation of a “capital and business alliance” with Japanese AI startup Elyza.

Under the agreement, KDDI will hold a 43.4% stake in Elyza, while its subsidiary, KDDI Digital Divergence, will own 10%, giving the operator a majority stake in the company. The startup, which was launched by members of a lab within the University of Tokyo, will become a consolidated subsidiary of KDDI by 1 April 2024.

The alliance will combine Elyza’s large language model (LLM) R&D capabilities in Japan with KDDI’s computing infrastructure, network resources and other assets, to speed up “the social implementation” of GenAI.

So far, Elyza has developed an LLM with 70 billion parameters, which is considered to be the highest in Japan.

In the coming months, the collaborators plan to provide three types of GenAI services to companies and local governments – these include a Japanese general-purpose LLM using an open model, a domain-specific LLM, and providing digital transformation support and AI software-as-a-service (SaaS) that draw on GenAI.

In another recent move, KDDI announced that it is working towards putting GenAI into the hands of customers by combining its metaverse and Web3 service, dubbed αU (Alpha-U), with Google’s GenAI model Gemini Pro. It intends to make the first services based on the technology available to the shopping and entertainment sectors.

Looking beyond AI, KDDI is also making strides towards being a leading digital service provider (DSP) with plans to take over LivePocket, a Japanese electronic ticket sales platform, for ¥4.65bn ($30.8m). The service, developed by Avex Live Creative (ALC), is used by more than 10 million customers, as well as some 40,000 event organisers.

KDDI noted in a translated statement that this acquisition will help it enhance its business by focusing on real-world events and it plans to expand the use of electronic tickets to a wider range of fields. It added that while its core business is focused on telecom, it is also looking to broaden its play and promote entertainment that centres on the digital realm.

The Japanese telco has previously partnered with Avex on music distribution services and event promotion, and this acquisition is expected to allow them to further contribute to the development of the entertainment industry.

This move is yet another step on KDDI’s journey towards a future where it delivers a wide range of digital services. Last month, the operator pushed forward with its strategy by unveiling plans to invest ¥500bn ($3.35bn) in Japanese convenience store business Lawson, which will see KDDI’s digital devices and services packages being added to the current Lawson convenience store offerings – see KDDI to offer digital services at your convenience.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV