Government and industry launch public-private partnership to build 18.4 gigawatt AI data center (Middle East, likely Saudi Arabia)
South Korea's government and industry have launched a public-private partnership to build an 18.4 GW artificial intelligence data center. The initiative extends beyond infrastructure to establish a national promotion system spanning semiconductors, cloud services, power and cooling solutions, and overseas export support.
On July 29, the Ministry of Science and ICT held a launching ceremony for the AI Data Center (AIDC) Alliance at the Lotte Hotel in Seoul. More than 400 companies and institutions participated, including the Ministry of Trade, Industry and Energy, the Financial Services Commission, the Ministry of Land, Infrastructure and Transport, as well as private companies, universities, and research institutes. The alliance operates under a government-private co-chair structure, with SK Telecom CEO Jung Jae-hun serving as the first private chairman and Korea Information and Communication Promotion Association President.
The AIDC Alliance implements the government's "National Strategic Industrialization of AI Data Centers" policy, announced in June. A three-part system—comprising a pan-ministerial task force, the AIDC alliance, and a dedicated support group—will address challenges in large-scale AI data center development, including power supply, land acquisition, and licensing. The government plans to finalize a draft enforcement ordinance of the AI Data Center Special Act by year-end, with the act taking effect in March 2027.
"AI data centers represent a high-tech integration of servers, storage, cloud, software, power and cooling technologies," Jung Jae-hun said. "Competition in the AI era is not between individual companies but between countries. A hyperscale AI data center will strengthen domestic technology competitiveness and Korea's AI export capabilities."
The alliance operates through three divisions—demand, supply, and base—plus an export industrialization task force. NAVER Cloud leads the demand division, promoting domestic cloud services and IT solutions based on its AI data center experience. LG Electronics heads the supply division, focusing on advancement and localization of core technologies including AI semiconductors and power and cooling systems. Kakao manages the base division, supporting ecosystem development, industry growth, regulatory improvements, and workforce training.
An export industrialization task force, jointly led by the supply and demand divisions, will develop comprehensive export strategies for AI data center design, construction, and operations in markets including the UAE, and promote entry into global AI learning and inference markets.
The government will deliver division roadmaps in Q3 2026, launch regular coordination meetings, and prepare 2027 budget proposals, the enforcement ordinance draft, and an AI data center cluster development plan by Q4. Operations will commence in Q1 2027, with cluster designation and projects launching thereafter.
Deputy Prime Minister and Minister of Science and ICT Bae Kyounghun stated, "AI data centers are critical infrastructure and the engine of AI revolution. We will fully support AI data center investment to strengthen Korea's competitiveness in design, construction, operation, and cloud technology, positioning Korea as an exporter of advanced intelligence solutions to the world."