South Korea's AI Infrastructure Play: SK Group and AWS Build the Road to Global Leadership

The $5.1 billion partnership between SK Group and Amazon Web Services (AWS) to construct South Korea's largest AI data center in Ulsan represents more than just a corporate investment—it is a strategic bet on the country's future as a global AI hub. With a 15-year commitment and plans to expand to 1 gigawatt of computing capacity, this project could redefine the trajectory of the Asia-Pacific (APAC) region's AI infrastructure landscape.

The Strategic Blueprint: Synergy Between Scale and Specialization

The deal's scale is staggering: $4 billion from AWS and 7 trillion won from SK Group will build a facility capable of housing 60,000 GPUs and reaching 103 megawatts by 2029. But the true advantage lies in the integration of SK's tech ecosystem with AWS's cloud expertise. SK Group's affiliates—SK Telecom for telecom infrastructure, SK hynix for semiconductor manufacturing, and SK Gas for energy—provide a vertically integrated backbone. AWS, meanwhile, brings its AI Zone framework, enabling clients to train models and deploy applications at hyperscale.

This synergy addresses a critical gap in global AI infrastructure: the need for localized, high-performance computing that avoids geopolitical risks. By anchoring the data center in Ulsan—a site chosen for its reliable LNG-powered energy and submarine cable connectivity—SK Group ensures the facility can meet the demands of industries from automotive to finance without relying on foreign data pipelines.

Economic Multipliers: A Catalyst for Growth

The project's economic impact is equally compelling. With 78,000 jobs projected across construction, IT, and energy sectors, it could add 0.3–0.5 percentage points to South Korea's GDP by 2030. The government's parallel investments—such as the National AI Computing Center with 15,000 GPUs—signal a coordinated push to turn the country into an AI powerhouse. For SK Group, this is a long-term play: the data center's modular design allows phased expansion, aligning its growth with rising AI compute demand.

Technical Edge: Semiconductors, Energy, and Scalability

The facility's technical architecture underscores its potential. Its hybrid cooling system—combining air and liquid cooling—reduces energy costs by 20–30% compared to traditional data centers. Proximity to an SK Gas LNG plant ensures a stable power supply, critical for uninterrupted AI training. Meanwhile, SK hynix's advancements in memory chips position the data center to handle the massive data throughput required for large language models (LLMs) and generative AI.

Geopolitically, the project bolsters South Korea's data sovereignty. By keeping AI workloads onshore, companies avoid U.S. export controls or Chinese surveillance risks, a priority as global tech decoupling accelerates.

Investment Implications: Three Plays to Consider

1. SK Telecom (017670.KS): As the telecom arm, it will manage the data center's network infrastructure, benefiting from rising demand for high-speed connectivity. Its partnership with AWS also opens opportunities in AI-as-a-service.
2. SK hynix (000660.KS): Its dominance in memory chips positions it to supply the data center's GPU farms. A would highlight its role in the AI compute boom.
3. LNG Infrastructure (SK Gas, etc.): The data center's energy needs create demand for reliable power. Investors might look to companies like SK Gas or LNG terminal operators for steady returns.

Risks and Considerations

The project's success hinges on execution. Delays in construction or regulatory hurdles could strain SK's balance sheet. Additionally, global AI adoption timelines remain uncertain, though the 15-year deal's phased rollout mitigates this risk.

Conclusion: A Pioneering Infrastructure Asset

SK Group's Ulsan data center is more than a building—it is a strategic asset at the intersection of AI, energy, and geopolitics. For investors, it signals a structural shift in South Korea's economy toward tech leadership. Those seeking exposure to the AI compute revolution should prioritize SK's affiliated companies, as they stand to benefit from both domestic demand and the global race for data sovereignty.

The Ulsan project is not just SK Group's bet—it is South Korea's. And in an era where data is the new oil, this infrastructure could prove the difference between resource scarcity and economic ascendance.