SK, AWS to build South Korea’s largest, multibillion-dollar AI data center

South Korea’s second-largest conglomerate SK and Amazon Web Services Inc. (AWS), the world's largest cloud platform provider, will build a 103-megawatt AI data center in the country amid fierce global competition for AI dominance.

The two partners will break ground in August on a facility equipped with 60,000 graphics processing units (GPUs) – the largest number of GPUs deployed in any data center in Korea – after a launch ceremony later this month, people familiar with the matter said on Monday.

The new data center, to be located in Ulsan’s Mipo National Industrial Complex, is a key piece of SK Group’s strategy to become a major player in the growing market for AI computing services.

Sources said SK plans to bring it online in phases: first delivering 41 MW by November 2027 and then scaling up to 103 MW by February 2029.

SK aims to eventually grow the AI data center’s capacity to 1 GW, turning it into a leading hub for AI workloads in northeast Asia, sources said.

To enable the multibillion-dollar investment, SK Group’s subsidiaries – SK Telecom Co., SK Broadband Co., SK Gas Ltd. and SK Hynix Inc. – are collectively putting forward resources alongside AWS, which is expected to contribute $4 billion to the project, according to sources.

SK Group has said its data center business affiliates SK Telecom and SK Broadband will spend 3.4 trillion won ($2.5 billion) in AI projects by 2028.

STRATEGICALLY LOCATED NEW POWER PLANT

The joint venture underscores the growing competition for computing power as companies prepare for the era of large-scale generative AI.

Currently, the Korean government’s flagship National AI Computing Center plans to deploy 15,000 GPUs – a quarter of SK’s installation – which shows the scale of SK Group’s ambitions.

AWS already operates a data center in Seoul and is investing several trillion won to build another in Incheon.

The new Ulsan facility is strategically located near SK Gas’ LNG combined-cycle power plant to secure a reliable power supply – a necessity for a facility requiring up to 100 MW, nearly matching the output of a small power station.

The SK-AWS partnership marks a significant milestone in SK’s foray into the data-intensive era of artificial intelligence.

SK Telecom Chief Executive Ryu Young-sang unveiled plans in March at Mobile World Congress (MWC) 2025 for a tailored data center service for clients ranging from large enterprises to startups – a strategy further demonstrated by its collaboration with AWS.

TURF WAR

In 2023, AWS, the cloud service subsidiary of Amazon.com Inc., said it will triple its investment in Korea to $5.9 billion through 2027, compared to the past five years, to gain the upper hand in the country’s digital transition.

Korea's cloud market is being clouded not just by foreign companies, such as AWS and Google, but also by domestic heavyweights, including Naver Corp., Kakao Corp., and NHN Corp.

Analysts expect foreign companies’ Korean market share to rapidly grow with their aggressive expansion of internet data centers (IDCs) in competition with local rivals, such as Samsung SDS Co., the IT unit of Samsung Group, and KT Corp.

Google, which offers the Google Cloud Platform, and Microsoft, with its Microsoft Azure cloud computing service, have been increasing their data center capacity in Korea for years.

China’s leading e-commerce company, Alibaba Group, and Tencent Holdings Ltd. are also closely watching the Korean market to expand their presence in the AI data center business.

Write to In-Soo Nam at isnam@hankyung.com
Jennifer Nicholson-Breen edited this article.