Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Middle East crisis clouds Samsung, SK, LG’s AI business in region
President Lee Jae Myung and United Arab Emirates President Mohammed bin Zayed Al Nahyan, back row right, applaud after Korea's Deputy Prime Minister and Science and ICT Minister Bae Kyung-hoon, front row left, and Abu Dhabi’s Executive Affairs Authority Chairman Khaldoon Khalifa Al Mubarak, front row right, signed a framework MOU on the two countries' artificial intelligence cooperation in Abu Dhabi, Nov. 18, 2025. Yonhap
By Nam Hyun-woo
As U.S.-Israeli strikes on Iran spiral into a broader regional conflict involving other Middle Eastern countries, Samsung Electronics, LG Electronics and SK hynix are facing new uncertainties in their business activities in the region related to artificial intelligence (AI) value chain.
Companies are now monitoring possible impacts on proposed AI data center projects in Saudi Arabia and the United Arab Emirates, as well as potential disruptions to the energy cost structure for data centers, which may slow the pace of server investment.
Korea agreed in November last year to participate in Stargate UAE, a $30 billion project to establish up to 5-gigawatt-level data centers in Abu Dhabi. No specific supply plans have been disclosed yet, although the three companies were expected to play key roles in areas such as semiconductors, infrastructure and heating, ventilation and air conditioning (HVAC).
Nvidia is expected to supply systems such as the Grace Blackwell GB300 for the project. Given that Samsung Electronics and SK hynix are the main suppliers of various types of memory, including high-bandwidth memory (HBM), to Nvidia, shipments bound for Stargate UAE are also likely to be included in the companies’ supply plans.
In November, the Donald Trump administration granted Nvidia approval to export chips to G42, a UAE state-backed AI firm participating in the project, raising expectations that the project would gain momentum. However, the latest crisis has raised the possibility of delays.
The situation in Saudi Arabia is similar. In May last year, Nvidia said it plans to supply GB300 chips to Saudi Arabia’s AI company HUMAIN. The project also gained momentum in November after the Trump administration approved the chip exports. HUMAIN plans to build AI infrastructure as part of Saudi Arabia’s $100 billion Project Transcendence, which is aimed at positioning the country as an AI powerhouse.
The latest crisis is unlikely to immediately halt or derail the projects, but industry officials said it could affect their pace. Given that many of the large-scale projects in the Middle East are led by governments, prolonged geopolitical tensions could also prompt adjustments in budget priorities.
Former LG Electronics CEO Cho Joo-wan, center, talks with Ahmed Al Khatib, chief development and delivery officer of Expo City Dubai, left, after the two sides formed a strategic partnership on building smart cities in Dubai, Nov. 19, 2025. Courtesy of LG Electronics
LG Electronics has been actively expanding its HVAC business for infrastructure projects in the region, leaving the segment potentially exposed to the risks stemming from the crisis.
In September it decided to cooperate in supplying cooling solutions for AI data centers in Saudi Arabia’s Neom city. The company also signed a partnership with Dubai in November last year to supply advanced HVAC solutions and AI-based smart home solutions for a smart city project.
HVAC is generally more profitable than other businesses due to its long-term supply and maintenance contracts and business-to-business (B2B) structure, but a prolonged Middle East crisis could lead to delays in project orders or investments.
Another concern for the companies is growing volatility in energy costs. Fluctuations in oil and gas prices can affect the electricity industry, driving up the overall cost of operating data centers. This could prompt tech firms to slow the pace of their investments.
“The overall momentum for AI investment is likely to remain intact, but the concern is that the pace of investment could slow,” an industry official said. “Rather than immediate risks to production or supply, companies may need to focus more on managing broader risks surrounding AI infrastructure.”