South Korea's AI Infrastructure Boom: How SK-AWS Is Shaping the Next Era of Tech Dominance

The $5.1 billion SK-AWS data center in Ulsan, South Korea, set to break ground in August 2025, is more than just a tech investment—it's a geopolitical and economic masterstroke. This partnership between SK Group and Amazon Web Services (AWS) marks the beginning of a new era in AI infrastructure, positioning South Korea as a global leader in scalable AI compute. With a capacity of 100 megawatts by 2029 and plans to expand to 1 gigawatt, this facility will house 60,000 GPUs—far surpassing the National AI Computing Center's 15,000 GPUs by 2027. This is a catalyst for South Korea's AI ecosystem, and investors should take note.

The Ulsan Data Center: A New Benchmark in AI Infrastructure

The Ulsan facility's innovation lies not just in its scale but in its energy efficiency. By repurposing “cold energy” from nearby SK Gas LNG plants, the center reduces operational costs by up to 30%—a model for sustainable tech infrastructure. This synergy with energy infrastructure ensures a stable power supply, a critical advantage in an era where data centers consume 2% of global electricity.

For SK Group, the project is a pillar of its “AI Infrastructure Superhighway” strategy, which includes hyperscale data centers, GPU-as-a-Service, and edge computing. SK Telecom (project manager), SK Hynix (AI chip supplier), and SK Gas (energy provider) form the core of this ecosystem. Their roles are strategic: SK Hynix's AI chips will power the data center's compute needs, while SK Telecom's leadership in 5G and cloud services positions it to dominate enterprise AI solutions.

Economic Multipliers and Job Creation

The economic ripple effects are staggering. By 2029, the project is projected to generate $18.3 billion in economic activity and 78,000 jobs—spanning IT, energy, logistics, and semiconductors. This isn't just about tech jobs; it's about reshaping industries. For example, SK's partnership with AWS could accelerate AI adoption in manufacturing, where South Korea aims to build over 2,000 AI-driven factories by 2030.

SK Hynix's AI chip roadmap, paired with Ulsan's GPU capacity, creates a self-reinforcing cycle: more compute power drives demand for advanced semiconductors, boosting SK Hynix's margins.

The AI Market's Growth Trajectory

While the 14.3% AI market CAGR cited in the prompt applies to the No & Low-Code Development Platform segment (2026–2033), the broader AI market is growing faster. The AI in marketing segment alone is projected to expand at a 28.2% CAGR through 2030, reaching $2.4 billion. By 2034, the overall AI market could hit $5 billion, fueled by healthcare, manufacturing, and autonomous driving. South Korea's AI chip sector, backed by $850 million in government funding, is a key enabler of this growth.

Risks to Consider

Overcapacity remains a concern. While SK's phased expansion (41 MW by 2027, 103 MW by 2029) mitigates this, global competition—especially from U.S. cloud giants—could pressure margins. Geopolitical risks, such as trade disputes or supply chain disruptions, also loom. However, SK's deep ties to South Korea's “AI Highway” initiative—a government-backed plan to build data centers nationwide—provide a buffer.

Why Invest Now?

The SK-AWS partnership is a generational bet on AI's future. Investors should prioritize:
1. SK Telecom (SKT): As the project's lead, it stands to benefit from recurring cloud and AI-as-a-Service revenue.
2. SK Hynix (000660.KS): Its AI chip portfolio positions it as a hardware backbone for the data center.
3. Enablers: LG CNS (071040.KS), which specializes in enterprise AI solutions, and Kakao (KCIC), whose AI platform Kakao Brain powers consumer applications.

LG CNS's recent wins in AI-driven logistics and healthcare systems highlight its role in monetizing SK's infrastructure.

Final Take

South Korea's AI infrastructure boom is not a flash in the pan—it's a structural shift. The Ulsan data center is the first of many investments that will cement the country's tech sovereignty. With geopolitical tensions favoring domestic cloud infrastructure and AI adoption rates soaring, SK's ecosystem is primed to capture multi-year tailwinds. For investors, this is a rare opportunity to buy into a foundational tech stack before it becomes indispensable.

The risks are real, but the upside is clear: South Korea's AI infrastructure is the next great growth story. Positioning in SK's ecosystem now could yield outsized returns as the world's demand for compute power soars.