Nvidia invests $1 billion in South Korean Naver for AI data center infrastructure development
Naver announced on July 27 that it will receive an equity investment of $1 billion (approximately 1.47 trillion Korean won) from NVIDIA, the world's largest AI semiconductor company. This marks the first time Naver has received a large-scale direct investment from an overseas big tech firm. Simultaneously, Naver is pursuing infrastructure funding of up to $9 billion (approximately 13.23 trillion Korean won) from global investment firm Brookfield. The total $10 billion funding will be invested in building a 1GW-level AI data center as part of the government's "Three Mega Projects," representing a strategic pivot from a search and shopping-focused internet platform to an "AI infrastructure company."
Naver signed the Strategic Investment Agreement with NVIDIA on July 24 at NVIDIA's headquarters in Santa Clara, California, attended by Naver Chairman Lee Jae Myung, CEO Choi Soo-yeon, and NVIDIA CEO Jensen Huang. Under the agreement, NVIDIA will purchase 7.24 million newly issued shares of Naver at 204,500 Korean won per share, giving NVIDIA a 4.5% stake. This surpasses founder Lee Jae Myung's shareholding and makes NVIDIA Naver's third-largest shareholder after the National Pension Service and BlackRock. Naver's stock price closed at 225,000 Korean won on the same day, an 8.4% increase from the previous trading day.
The investment follows the "Gigawatt-level AI Factory Construction Agreement" announced by the two companies in June during CEO Huang's visit to South Korea. Naver currently operates a large-scale AI data center called "Gak Sejong" in Sejong City and plans to introduce NVIDIA's next-generation AI infrastructure platform, DSX, to upgrade it into an AI Factory. An AI Factory redefines data centers—traditionally providers of computing resources—into facilities that produce "tokens," the basic units AI uses to process and generate text and information, by inputting data and power. Naver aims to expand this facility to 55MW by the first half of 2027, 100MW by the end of 2027, 200MW by 2028, and eventually to 1GW.
To achieve this scaling, Naver has partnered with Brookfield, a global alternative investment firm managing over $1 trillion in assets. Naver plans to secure up to $9 billion through project financing involving multiple financial institutions by 2028. Brookfield not only manages assets but also directly owns and invests in real infrastructure such as data centers, power systems, and renewable energy. NVIDIA required Naver to secure separate funding of $9 billion as a precondition for its equity investment; the Brookfield funding fulfills this requirement. NVIDIA's investment payment deadline is October 30, and Naver expects to finalize the Brookfield contract process before then.
This is Naver's first capital increase in 22 years. To address shareholder concerns about value dilution, Naver plans to retire 4.9 million of its own shares, worth approximately 1.017 trillion Korean won, next month. Industry experts assess that this investment will establish Naver as a comprehensive AI company spanning AI models and infrastructure.
Previously, Naver operated primarily as an internet platform company focused on B2C businesses like search advertising and commerce. However, it faced criticism for being constrained by domestic market growth limits. AI technology and infrastructure, by contrast, are capital-intensive B2B businesses. Naver is targeting "Sovereign AI" demand from governments and companies worldwide seeking to avoid dependence on U.S. big tech for their data and languages. A Naver official stated, "We plan to generate revenue from the AI Factory starting in 2027 and absorb Sovereign AI demand in the Asia-Pacific, Europe, and the Middle East." Kyobo Securities estimates that Naver's AI Factory business will generate 2.5 trillion Korean won in revenue by 2028.
The partnership extends beyond the equity investment. Naver Cloud, a subsidiary, is discussing an "AI Compute Partnership" with NVIDIA for global AI Factory projects. Additionally, Naver is enhancing its large language model, HyperCLOVA X, by combining NVIDIA's open-source AI model Nemotron3 Ultra with its proprietary data and training technologies.
Chairman Lee Jae Myung stated, "This marks a significant transformation and leap to a new stage for Naver. Beyond capital, this collaboration will provide a great opportunity to scale our expertise through the global brands and networks of both companies."