SK Telecom unit SK Hyper is in talks with tech firms and investors to finance 15GW of data center capacity in South Korea by 2035; the first 5GW will cost $350B

South Korea will have 5GW of new AI data center capacity financed by late 2024, reducing infrastructure bottlenecks.

SK Hyper, a subsidiary of SK Telecom, is seeking to raise $350 billion to fund the initial 5-gigawatt phase of its 15-gigawatt AI data center expansion in South Korea by 2035. The company is in discussions with major technology firms and financial investors to secure this capital, with plans for an initial fundraising round by early next year. SK Hyper aims to share the total costs with data center tenants and external investors, emphasizing a flexible investment pace tied to market demand. The company also has a 900-megawatt project underway in Ulsan and a 100-megawatt project with Amazon Web Services. Established in July, SK Hyper's ambitious plans signal a significant push to meet the growing demand for AI infrastructure.

The sheer scale of SK Hyper's funding request highlights the immense capital required to build out the AI infrastructure needed for next-generation computing. This move signals a potential shift in how data center capacity is financed, with a greater reliance on joint ventures and co-investment from both technology partners and financial institutions. The company's strategy to share costs with tenants suggests a model where AI hardware and facility costs are more directly integrated with service provision.

This initiative could significantly boost South Korea's position as a hub for AI development and semiconductor manufacturing by providing the necessary power and cooling infrastructure. Competitors and investors will be watching how SK Hyper navigates the current market sentiment around AI profitability and data center credit risks, as well as its ability to secure partnerships and government support for site acquisition.