Object storage appliance maker Cloudian Inc. is taking the unusual step today of spinning off an independent company to build an edge processing platform, initially for the Japanese market.

Cloudian, which has raised $173 million for what it calls its infinitely scalable storage platform that’s compatible with Amazon Web Services Inc.’s S3 cloud storage service, is launching its new majority-owned subsidiary, called Edgematrix Inc.

The company is starting with $9 million in funding from Cloudian and three investors: telecommunications giant NTT Docomo Inc., construction powerhouse Shimizu Corp and Japan Post Capital Co., Ltd. The first two companies are also customers for the new edge devices.

The new company will build ruggedized artificial intelligence-enabled computers designed to process large-scale data sets in places like factory floors or atop billboards. The devices will leverage Cloudian’s HyperStore platform for managing large-scale data sets, data analytics and machine learning use cases.

Cloudian Chief Executive Michael Tso said the company grew out of an informal experiment to identify new applications of deep learning for a customer that targets billboard messaging to passing vehicles. “It was a science project that got real customers,” he said. The technology was outside of Cloudian’s main focus, so the decision was made to spin off the business.

“I thought the ideas were too good to kill,” he said. “I told them that if they can find someone to invest they can start their own company.” The original plan was to raise just $3 million, but early customers wanted to join the round, Tso said.

The device, which is currently shipping, packs a graphics processing unit and an Arm processor into a ruggedized box that’s just one foot long and four inches wide. It can transmit high-definition video over both cellular data and Wi-Fi connections. “It’s not just an edge computing device; it’s an edge AI device,” Tso said, citing the importance of the GPU.

In addition to the billboard application, the device is already being used for manufacturing quality inspection and to manage traffic congestion by counting cars on a road to enable dynamic lane configuration.

The new company will initially focus solely on the Japanese market, which is where its two largest customers are located. There are no immediate plans to enter the U.S.

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