Kenneth Chung-Hou Tai, 74, was one of the co-founders of Acer. His new startup, Zettabyte, works directly with Taiwanese server companies to improve the computing prowess of GPUs through software. What will this mean for the new generation of AI?

Nearly half a century ago, Kenneth Chung-Hou Tai (邰中和) co-founded the laptop giant Acer alongside Stan Shih (施振榮). Now, he is starting his own company Zettabyte, which will marry artificial intelligence software with Taiwanese server manufacturers and data center operators to supercharge Taiwan's largest AI data center.

Tai, 74, was the first salesperson in Taiwan to sell CPUs, the central processing unit at the heart of all computers. He sold Intel microprocessors for Mitac until Shih recruited him to help found Acer.

Since his departure from Acer, he's been focused on venture capital and startups. He began by investing in the telecommunications company Chief Telecom, and then he founded the VC InveStar Capital, which backed the ASIC (application-specific integrated circuit) giant Marvell and Richtek Technology, which was eventually acquired by MediaTek.

Dot-com Bubble Made Tai Go All-in

Chief Telecom was a difficult experience for Tai, but this laid the foundation for his current startup in the era of AI.

Founded in 1991, Chief was created by Lu Ming-kuang (呂明光), another Acer alumni. Tai came on board first as an investor, then as its chairman from 1999 to 2006. Chief benefited from its principle of "telecom neutrality" and became the central hub of internet exchange points and submarine communications cables linked to Taiwan. In the early days of the Internet boom, Tai was among the first to build data centers in Taiwan.

Then came the dot-com crash. The telecom sector suffered mightily. "Chief put me under a lot of financial strain," admits Tai.

Chief CEO Johnny Liu (劉耀元), who joined the company in 2000, witnessed firsthand what Tai went through. "By the time we built our second data center, business had dried up. What was supposed to be five floors of server rooms dwindled to five server racks, because many of our customers had gone out of business."

Tai took out mortgages on two houses and personally footed over NT$2 billion to keep Chief afloat. In 2006, Chief was bought out by Chunghwa Telecom; in 2018, it was listed on the stock exchange, and it's posted revenue growth every year since. The Tai family still holds a 5% share of its stocks.

A Glorious Return to Data Centers Two Decades Later

Now, Tai has come back to Chief, but as a client rather than an owner.

Tai's AI software startup Zettabyte is building Taiwan's first hyperscale AI data center. And Chief has a key role to play.

Zettabyte first approached the server company Wistron about installing its software on Wistron's AI servers.

Zettabyte also put those servers in Chief's smart server rooms. Chief operated the servers and provided Zettabyte with infrastructure-related services, such as power and internet.

Half the power (10MW) of this smart server building has already been leased to one of North America's four largest cloud service providers. Zettabyte also rented 3MW of capacity.

Tai says that the Zettabyte servers will go into operations in March of 2025. All the servers will be liquid-cooled.

"Taiwan is a leader in AI hardware, but I want to add value through software," says Tai. "We want to be the VMware for GPUs."

VMware is the leader of virtual computing, which uses specialized software to maximize the efficacy of computing hardware. Clients include tech giants like Amazon Web Services (AWS), Microsoft, Google Cloud, and Intel.

Zettabyte wants to do this for graphics processing units, or GPUs, which are pivotal for AI computing. Its Zware software can improve the computing of GPUs, so that AI computing across servers and data centers can allocate the computing resources better and reduce the power draw of data centers.

A report by Gartner predicts that by 2027, 40% of current AI data centers will experience operational bottlenecks due to power constraints. More energy-efficient computing will be necessary. Breakthroughs in computing software and hardware will lead to more efficient infrastructures and computing that will improve the power usage effectiveness of data centers.

Zettabyte is working closely with Taiwanese ODM contractors that build 70% of the world's AI servers: Wistron, Pegatron, and Hon Hai.

Tai has deep personal connections to the leaders of big PC brands and major contractors, such as Wistron chairman Simon Lin (林憲銘) and Pegatron chairman T.H. Tung (童子賢). Tai is also an independent director on the board of another laptop leader, Asus. This gives him an advantage as the bridge between software and hardware for AI servers.

Tai shows off test results that prove GPUs can improve computing by 18-22% when using Zware, compared to other open-source software on the market.

"We are happy to see the potential in Zware, its technology may deliver the dual benefits of reducing power consumption while simultaneously increasing AI computing power," says James Shue (徐衍珍), Senior Vice President and CTO of Pegatron in a press release.

Zettabyte wants to do more than just software. It wants to invest in AI data centers and engage in computer management. Currently, Zettabyte is already trying out this business model in Chief's AI data centers. To Tai, Taiwan is just the beginning. He’s set his sights on Asia and the Middle East, with a particular focus on proprietary AI operated by companies or even countries.