South Korea launches a domestic edge data center initiative to bootstrap local chipmakers and enterprises with AI-compute hubs.
South Korea's government is advancing a KRW27.3 billion ($19.9 million) initiative to construct micro data centers (MDCs) using domestically manufactured AI chips, aimed at providing low-latency and cost-effective AI services to small and medium-sized enterprises (SMEs), hospitals, and public institutions. Led by the Ministry of Science and ICT, the project will deploy container-based data centers across non-metropolitan regions throughout South Korea, integrating all core infrastructure—compute, storage, power, cooling, and security—into modular units that can be positioned near edge locations such as factories or clinics. The strategy seeks to strengthen national AI chip production, expand regional edge deployments of AI services, and support domestic chipmakers like Furiosa AI and Rebellions by providing platforms to secure real-world deployments, while simultaneously reducing dependence on U.S. firms like GPU leader Nvidia. A ministry official stated that the project's goal is to establish a proof-of-concept environment where domestic AI chips can be tested and applied in real data center settings—an area currently dominated by Nvidia. The project will run from 2025 through 2029, with regions such as Daegu and Gwangju currently under consideration for initial deployments.
The initiative addresses a significant gap in South Korea's AI infrastructure landscape. Currently, over 90 percent of commercial data centers in Korea are concentrated in the Seoul metro area and are largely controlled by global cloud providers like AWS and Microsoft Azure. These global providers set strict hardware and operational requirements, leaving little room for infrastructure experimentation by local firms, which has created hurdles for domestic AI chipmakers seeking to commercialize their solutions. The new MDC project aims to address this bottleneck by mandating participating companies to create a scalable, cloud-like architecture that links multiple MDCs across the country.
South Korean conglomerate SK Group is simultaneously pursuing an ambitious mega-scale AI infrastructure initiative, confirming its partnership with AWS to build what will be the largest and most powerful AI data center in the nation. Construction of the 103-megawatt facility will begin in August in Ulsan's Mipo National Industrial Complex and will eventually house 60,000 GPUs—the largest GPU deployment ever in a Korean data center. The project will unfold in phases, with 41 megawatts of capacity coming online by November 2027, expanding to the full 103 megawatts by February 2029, with plans to further scale the site to a gigawatt-class facility. AWS will invest $4 billion, while SK's key subsidiaries—SK Telecom, SK Broadband, SK Gas, and SK Hynix—will contribute substantial resources. SK Telecom and SK Broadband are planning to invest 3.4 trillion won ($2.5 billion) in AI-related initiatives by 2028. The data center's proximity to SK Gas's LNG combined-cycle power plant ensures stable power delivery, critical for the AI infrastructure.
Chinese company Alibaba Cloud recently said it was opening a second data center in South Korea by the end of last month, further expanding its regional footprint to meet rising demand for cloud computing and artificial intelligence services. Alibaba Cloud originally entered the South Korean market with the launch of its first data center in March 2022, following an announcement in late 2021.