TDK Ventures Is Skipping the AI App Race — and Betting on the Hardware Underneath It

While much of venture capital is chasing AI models and software applications, TDK Ventures is taking a different route in India. The corporate venture arm of Japan’s TDK Corp plans to deepen investments in hardware-led deep tech, including robotics, photonics, semiconductor packaging and EV fast-charging technologies.

TDK Ventures president Nicolas Sauvage said the firm sees AI as a catalyst for breakthroughs in material science and deep technology, but intends to stay away from the crowded software and AI-model investing race. Instead, it is focusing on technologies where advances in hardware can become foundational to the broader AI ecosystem.

India has already become an important part of that strategy. TDK Ventures began investing in the country around three years ago and has made six investments so far, with follow-on backing in some companies. India is now the firm’s second-largest geography by number of investments after the United States. Globally, TDK Ventures manages about $500 million across four funds.

One example is Bengaluru-based C2i, founded by former Texas Instruments engineers and recently acquired by Infineon. The startup builds power-delivery technology for AI chips, addressing the challenge of supplying rapidly increasing current densities to GPUs. TDK Ventures said it screened roughly 30 companies globally before backing C2i, viewing its approach as technically robust and practical.

The investor is now looking further into what it calls physical AI, including robotics and mobility. It has already invested in companies such as Agility Robotics and is exploring technologies that could improve industrial robot dexterity. In India, it also sees semiconductor manufacturing and industrial infrastructure — including cluster development in Gujarat — as critical building blocks for AI-linked growth.

TDK Ventures is effectively splitting its India thesis in two: technologies designed specifically for the Indian market, and technologies built in India that can compete globally. Its bet is that some of AI’s biggest businesses may emerge not from another software layer, but from the hardware making the entire system possible.