SK Group and Amazon to invest $5.1 billion in South Korea's largest AI data centre

South Korea is set to become home to its largest AI data centre, thanks to a major investment led by SK Group and Amazon Web Services (AWS). The two companies will jointly invest approximately 7 trillion won ($5.11 billion), with AWS contributing $4 billion toward the ambitious project in the southern city of Ulsan, according to the country’s Science Ministry.

Construction is scheduled to begin in September, with the data centre expected to be fully operational by 2029. The facility will launch with a capacity of 100 megawatts, with plans already in place to scale it up tenfold. SK Group Chairman Chey Tae-won said the goal is to eventually reach a capacity of one gigawatt, positioning the centre as a key global hub for AI computing.

The initiative aligns with South Korea’s broader vision to decentralize high-tech infrastructure and promote development beyond the capital region. President Lee Jae Myung, who attended a meeting with Chey and top tech executives, hailed the project as a model for how advanced industries can thrive in regional areas.

Chey underscored the importance of artificial intelligence to South Korea’s economic future, noting that domestic AI demand will increasingly require world-class computing infrastructure. The Ulsan data centre is expected to play a vital role in supporting this demand, strengthening the country's digital competitiveness on the global stage.

The announcement has also sparked bullish sentiment in South Korean markets. AI-related stocks surged on Friday, reflecting investor optimism about the country’s tech roadmap. SK Hynix climbed over 3%, Kakao soared 11%, and LG CNS gained 9%, helping push the benchmark KOSPI index past the 3,000 mark for the first time in three and a half years.

This strategic move by SK Group and AWS could signal a turning point in South Korea’s bid to become a leading force in global AI infrastructure, with long-term implications for the domestic tech ecosystem, regional development, and international cloud competition.

Summary:

SK Group and Amazon Web Services will invest over $5 billion to build South Korea’s largest AI data centre in Ulsan. The project, aimed at powering the country's AI ambitions, is expected to begin construction in September and reach full capacity by 2029. The move has boosted local tech stocks and aligns with national goals of regional tech development and global AI leadership.

FAQs: SK Group and Amazon's AI Data Centre in South Korea

1. What is the total investment being made in the AI data centre project in Ulsan?

The project will see a total investment of around 7 trillion won (approximately $5.11 billion), with Amazon Web Services (AWS) contributing $4 billion and the remainder coming from SK Group.

2. Where will the new AI data centre be located?

The data centre will be built in Ulsan, a southern industrial city in South Korea, marking a strategic move to decentralize the country’s high-tech infrastructure.

3. When is construction expected to begin and finish?

Construction is scheduled to begin in September 2025, and the data centre is expected to be fully operational by 2029 with an initial capacity of 100 megawatts.

4. What is the planned capacity of the data centre?

At launch, the facility will support 100 megawatts, but SK Group Chairman Chey Tae-won has stated that the long-term plan is to expand to one gigawatt, making it a global-scale AI hub.

5. Why is this project significant for South Korea?

The data centre is expected to strengthen South Korea’s AI infrastructure, support domestic AI demand, and promote regional tech development outside the Seoul metropolitan area. It also positions South Korea as a serious player in global cloud and AI infrastructure.

6. How has the market responded to the announcement?

AI-related stocks rallied following the announcement. Notably, Kakao surged 11%, LG CNS rose 9%, and SK Hynix climbed over 3%, pushing the KOSPI index above 3,000 for the first time in 3.5 years.

7. What role does Amazon Web Services (AWS) play in the project?

AWS will invest $4 billion, making it a major partner in building and likely operating the cloud infrastructure component of the data centre, which will enable AI processing at scale.

8. What are the broader business implications of this project?

The investment signals growing demand for AI compute power, increasing foreign collaboration in South Korea’s tech sector, and greater emphasis on regional innovation ecosystems. It could also spur more AI and cloud investments across Asia.

9. How does this project fit into South Korea’s national technology goals?

The project aligns with South Korea’s goal to become a global AI and tech leader, while also encouraging balanced regional development by moving high-tech infrastructure beyond the Seoul capital area.

10. Will the data centre support global or domestic AI workloads?

The centre is primarily aimed at handling South Korea’s domestic AI demand, but its scale and future capacity of 1 gigawatt suggest it will also support global AI applications and data-intensive services.