AI News Monitor

Amazon and South Korea’s SK Group announced plans on Friday to invest around $5 billion to build the country’s largest data center, a move aimed at meeting surging demand for artificial intelligence services.

The project, backed by $4 billion from Amazon Web Services (AWS), the e-commerce giant’s cloud computing division, will be constructed in the southern city of Ulsan and is expected to be fully operational by 2029 with an initial capacity of 100 megawatts. The facility will house four times as many graphics processing units (GPUs) as South Korea’s National AI Computing Center, which is set to deploy 15,000 GPUs by 2027.

SK Group Chairman Chey Tae-won said the companies intend to eventually expand the data center’s capacity to one gigawatt, positioning it as a global hub for AI infrastructure. “Artificial intelligence is crucial for South Korea’s growth,” he said during a meeting attended by government officials and tech executives.

The investment comes as South Korea’s AI market is projected to grow by 12.1% this year, reaching $2.25 billion, according to Invest Korea. Key industries such as telecommunications, manufacturing, and health care are driving demand.

AWS, which already operates a cloud region in Seoul, has been expanding aggressively in Asia. The company recently pledged to invest $13 billion in Australia over the next five years to bolster AI infrastructure there.

The announcement fueled a rally in South Korean AI-related stocks, with shares of SK Hynix, Kakao, and LG CNS surging on Friday. The benchmark KOSPI index also crossed the 3,000-point threshold for the first time in over three years.

The Ulsan data center underscores South Korea’s push to become a leader in AI technology while decentralizing its high-tech industry beyond the capital region. President Lee Jae Myung praised the project, saying it “sets a good example that South Korea’s high-tech industry is possible not only in the metropolitan area but also in the provinces.”

Construction is set to begin in September.