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- SK Group and Amazon Web Services to co-invest over $5 billion in South Korea’s largest AI data center.
- AI-related stocks including SK Hynix and Kakao rally following the announcement.
- Ulsan chosen for strategic decentralization away from Seoul’s crowded tech infrastructure.
- South Korea positions itself against regional competition in the rapidly expanding Indo-Pacific data center market.
South Korea’s artificial intelligence ambitions received a powerful boost on June 20 as SK Group and Amazon Web Services unveiled a $5.1 billion plan to establish the country’s largest AI-focused data center in the southeastern city of Ulsan.
$5 Billion Vision for AI in Ulsan
The announcement, made public by the Ministry of Science and ICT, sparked an immediate reaction in the financial markets, lifting AI-related stocks and pushing the benchmark KOSPI index past the 3,000 mark for the first time in over three years.
At the center of the plan is a sprawling AI complex slated to begin construction in September. Initially built with a capacity of 100 megawatts, the facility is expected to become fully operational by 2029. SK Group Chairman Chey Tae-won also revealed intentions to scale the hub tenfold to one gigawatt, marking a bold step toward transforming Ulsan from an industrial powerhouse into a digital innovation nexus.
Stock Market Reacts as AI Momentum Builds
The financial markets were quick to reflect investor confidence. Shares of SK Hynix, a key player in AI memory chips, rose by more than 3 percent, while tech platform Kakao jumped 11 percent. LG CNS also recorded a 9 percent boost. The enthusiasm extended across the broader tech sector, reinforcing investor expectations that South Korea is preparing for a pivotal role in the future of AI infrastructure.
This momentum reflects more than just market optimism. Analysts see it as validation that SK Group’s integrated approach to AI, chips, and infrastructure could redefine the country’s tech landscape and drive long-term growth across multiple sectors.
Ulsan Emerges as Strategic Tech Hub Beyond Seoul
This massive investment aligns closely with the country’s broader national strategy to decentralize its tech footprint. By situating the AI center in Ulsan instead of Seoul, the government is working to ease pressure on the capital’s aging power and data infrastructure. Ulsan, traditionally known for heavy industry, is poised to undergo a significant transformation, as the hub attracts talent, resources, and innovation from across the region.
The location choice also reflects South Korea’s ambition to build “Data Valleys” in underserved regions. With energy access and space becoming constraints in major cities, projects like this could offer a more sustainable blueprint for future tech development.
Global AI and Chip Race Intensifies in the Indo-Pacific
Beyond domestic benefits, the SK-AWS partnership positions South Korea more competitively in the high-stakes race to dominate the Indo-Pacific data center landscape. Despite its high internet penetration rate of over 97 percent, South Korea has trailed regional rivals like China in raw data center capacity.
This project, with the potential to expand to a full gigawatt, places the country in the same league as top-tier hyperscale operators.
The announcement also underscores the growing synergy between AI infrastructure and semiconductor innovation. Earlier in April, SK Group’s chairman met with TSMC’s CEO to strengthen ties on advanced semiconductor technologies, particularly high-bandwidth memory (HBM). With SK hynix holding a commanding share of the global HBM market and supplying industry leaders like NVIDIA, the group’s investment in AI infrastructure appears tightly woven into its broader technological strategy.
