Amazon (AMZN) in $5B Investment to Boost AI in South Korea

E-commerce and cloud computing giant Amazon (AMZN) is teaming up with South Korea’s SK Group to invest around $5 billion in building the country’s biggest data center to handle domestic AI demand.

AI Driver

According to the country’s Science Ministry, the deal involves a $4 billion spend from Amazon Web Services, Amazon’s cloud services provider.

The AI data center in the southern city of Ulsan is expected to begin construction in September and be fully operational with a capacity of 100 megawatts by 2029.

It will also house four times as many GPUs as South Korea’s National AI Computing Center, which aims to deploy 15,000 GPUs by 2027.

SK Group Chairman Chey Tae-won said he planned to expand the data center’s capacity to one gigawatt in the future and make it a global hub that handles domestic AI demand. He added that artificial intelligence was crucial for South Korea’s growth.

Asian Expansion

According to Invest Korea, the size of the Korean AI market is estimated to grow by 12.1% this year to reach $2.25 billion. The market is expected to grow at an annual average growth rate of 14.3% to 2027, driven by its use in major industries such as information and communication, manufacturing, medical, public/defense, finance, and education.

AWS has a cloud region in South Korea, located in Seoul, with four availability zones that launched in 2016. The company is also building a data center in Seo-gu, Incheon as it ramps up its expansion in Asia and Oceania.

It recently announced that it is planning to invest A$20 billion, or US$13 billion, in Australia from 2025 to 2029 in order to improve the AI infrastructure in the country. It is the largest technology investment in Australia’s history.

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