SK Hyper, the AI data center development unit of SK Telecom (017670), is seeking to raise $350 billion (about 462.91 trillion won) to expand its artificial intelligence infrastructure.
Jung Suk-keun, who heads SK Telecom's AI Company-in-Company (CIC), an in-house independent business unit and serves as chief executive of SK Hyper, disclosed the plan in an interview with Bloomberg on the 22nd local time. "We are currently in talks with large technology companies and financial investors to secure the funding," the CEO said.
The money will go toward the first 5-gigawatt phase of a 15-gigawatt data center buildout the company plans to complete in South Korea by 2035, the CEO said. "The first phase alone, at 5 gigawatts, will require $350 billion including equipment costs," the CEO added.
SK Hyper plans to secure an initial round of outside capital between the end of this year and early next year, followed by additional fundraising over the next three to four years. "We plan to share the total cost with data center tenants and outside investors," the CEO said.
The fundraising comes as investor sentiment has soured, with renewed debate over the profitability of AI and spreading concerns about credit risk tied to data centers. "Rather than pushing the entire plan at once, we will adjust the pace of investment according to actual demand," the CEO said. "We will respond to market demand while managing risk appropriately."
Established in July this year as a subsidiary of SK Telecom, SK Hyper is targeting Asian markets including Japan and Taiwan as well as South Korea. SK Telecom plans to invest a total of 750 billion won in SK Hyper by 2030.
SK Hyper is currently developing a 900-megawatt project in Ulsan and is also working with Amazon Web Services (AWS) on a 100-megawatt data center project. "We are in discussions with the government to secure additional sites," the CEO said.