SK, AWS team up for multi-billion dollar AI data center in Ulsan
An aerial view of Ulsan Mipo National Industrial Complex / Courtesy of Ulsan
SK Group will team up with Amazon Web Service (AWS) to build a mega-sized artificial intelligence (AI) data center in Ulsan, in a project that is speculated to involve billions of dollars in investments from the two sides.
According to industry officials, Sunday, SK Group will hold a groundbreaking ceremony for the data center in August, with the plan of building a 103-megawatt data center on a 36,000-square-meter site in Ulsan Mipo National Industrial Complex.
The two sides plan to begin operations for 40-megawatt capacity by November 2027 in the first phase, and complete the full capacity by February 2029.
It will be the first AI data center equipped with more than 100 megawatts of infrastructure, and the facility will use approximately 60,000 graphics processing units (GPUs). This is four times the capacity of the national AI computing center currently being planned by the government, which is expected to have 15,000 GPUs.
The project is anticipated to create an economic impact of 25 trillion won ($18.3 billion), as well as 78,000 jobs.
SK Group refused to confirm, but the deal reportedly involves billions of dollars of investments from both sides. SK Telecom and its subsidiary SK Broadband, which will be in charge of the AI data center business, have outlined that they will invest 3.4 trillion won for AI, and reportedly cover any excess costs spent on the Ulsan data center.
AWS currently operates a data center in Seoul and is also building another facility in Incheon's Seo District, with construction underway since late last year following an investment of trillions of won.
A server rack at SK Broadband's data center in Guro District, Seoul / Courtesy of SK Telecom
Ulsan, a southeastern industrial city, is not typically a preferred location for AI data centers, as tech companies tend to favor areas closer to Seoul. However, the two sides apparently selected the city because of its proximity to SK Gas’ liquefied natural gas power plant, which makes it easier for securing the massive amount of electricity required to operate the facility. A 100-megawatt load is comparable to the output of a small thermal power plant.
The data center will likely serve as the pinnacle of SK Group’s AI business, which ranges from SK Telecom’s AI service and data center operation, SK hynix’s memory chip firm and other SK units’ energy business.
SK Group Chairman Chey Tae-won stressed that the AI data center business should be the pinnacle of the group’s portfolio given its broad presence in energy, telecommunications, services and semiconductors.