Frontier IP Group PLC (LSE:FIPP, FRA:8WT) investee company 2D Photonics Group has secured European Commission approval for €211 million in Italian state aid to develop and commercialise graphene-based optical technology designed to address a critical bottleneck in artificial intelligence infrastructure.
Frontier, an intellectual property commercialisation specialist, holds a 9.1% stake in 2D and described the funding as one of the largest single public investments ever made in an Italian deep-tech startup.
The grant has been made to CamGraPhIC, the research arm of 2D, under the European Commission's state aid framework for research, development and innovation.
The technology targets what the company describes as one of AI's most pressing physical constraints: the speed at which data moves between chips, accelerators and memory inside advanced computing systems.
Today's AI infrastructure is no longer limited by raw processing power but by the interconnects that transfer data between components, which consume significant energy, generate heat and create latency.
CamGraPhIC's graphene-based optical input/output platform aims to deliver higher bandwidth density, lower latency and substantially lower energy consumption than conventional silicon photonics.
A central element of the project is the construction of a pilot manufacturing facility near Milan, scheduled to become operational in 2028, which will take graphene photonics from laboratory research into real-world production.
The project is expected to create more than 150 highly skilled jobs across photonics engineering, materials science and semiconductor manufacturing.
2D Photonics completed a €25 million Series A funding round in March 2025, backed by the Nato Innovation Fund, the Sony Innovation Fund, Bosch Ventures and other investors.
The company was jointly spun out from the University of Cambridge and Italian research institute CNIT.
Frontier IP chief executive Neil Crabb said the scale of the investment demonstrates the potential of 2D Photonics' technology to transform artificial intelligence and other advanced applications.
2D Photonics chief executive Ben Jensen said compute performance continues to advance but data movement has failed to keep pace, and graphene-based optical technology offers a route to moving vastly more data at far lower power consumption.