MODA to spend NT$10 billion to cultivate AI startups

Taipei, Oct. 14 (CNA) Digital Affairs Minister Yennun Huang (黃彥男) said on Monday that the Ministry of Digital Affairs (MODA) is planning to push for a program by spending NT$10 billion (US$311 million) to cultivate local startups in artificial intelligence (AI) development.

Speaking at an AI forum organized by Shih Hsin University, Huang said MODA would disclose the details of the NT$10 billion plan at the end of this year.

He added that the investment is scheduled to start next year aiming to help at least 20 AI startups to grow and allow them to raise funds on the capital market.

Likening the current AI boom to the industrial revolution, Huang said Taiwan should catch up with trends to add momentum to economic growth by pushing up industrial productivity.

Otherwise, Huang said, Taiwan will be left behind.

To develop AI, Taiwan needs technologies, talent and resources, Huang said.

However, the country is full of small and medium-sized enterprises with capital limited so financial assistance from the government is a must, he added.

According to a white paper published by the Small and Medium Enterprises and Startup Administration of the Ministry of Economic Affairs, the number of Taiwan's SMEs hit 1.63 million, as of the end of 2022, accounting for 98.9 percent of the total.

Under the Standards for Identifying Small and Medium-sized Enterprises, an SME has paid-in capital of no more than NT$100 million or fewer than 200 regular employees.

Huang said capital is the critical factor for AI startups to expand so MODA has secured NT$10 billion in financial assistance from the National Development Fund of the Executive Yuan to help these smaller companies, adding that the money will be spent over 10 years from 2025.

He said the AI startup program is expected to result in capital formation ranging between NT$100 billion and NT$200 billion in the local digital industry and raise job openings by about 10,000, while at least 20 companies will have the potential to raise funds from the capital market.

He added the NT$10 billion spent in the 10 years is expected to create about NT$1 trillion in production value.

Meanwhile, Deputy Minister of Digital Affairs Herming Chiueh (闕河鳴) told a hearing at the Legislative Yuan that MODA is planning a five-year government AI strategic development program.

He added that MODA would be given access to a NT$19 billion budget starting from 2026 as a tool to improve the efficiency of government operations.

The strategies under the five-year plan will include smart services, automated administrative services, and optimized AI development mode to provide convenience to the public to gain access to services from the government, according to MODA.