SK Data Center Arm in Talks to Fund $350 Billion AI Buildout

SK Hyper Co. is in talks with big tech firms and financial investors to secure funding for an envisioned $350 billion data center buildout, joining a global rush to roll out AI infrastructure despite concerns about future demand.

The SK Group’s fledgling data center arm has begun discussions with potential partners to help finance a plan to build 15 gigawatts of data center capacity in South Korea by 2035, said Chung Suk-geun, SK Hyper’s chief executive officer. The first 5-gigawatt phase alone would require $350 billion including equipment, he told Bloomberg Television.

The company aims to secure its first round of external capital by the end of this year or early 2027, followed by further fundraising over the next three to four years. SK plans to share the overall cost with data center tenants and outside investors, he added.

“We are under discussions with many strategic and financial partners,” Chung said in an interview. “We want to be prepared for meeting the market demand by making data centers in Korea.”

SK is pursuing an ambitious blueprint at a time markets are gyrating on fears of an AI bubble. Investors funding data center projects are getting nervous that spending on future AI services won’t be enough to justify the trillions of dollars flowing into a global computing buildout.

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Chung said his company would adjust the pace of investment according to actual demand, rather than commit to the entire plan upfront. “We are going to manage our risk appropriately, meeting with market demand,” he added.

Established in July as a unit of SK Telecom Co., SK Hyper is seeking to attract global technology companies to South Korea as a base for AI training and operations, serving Asian markets such as Japan and Taiwan rather than relying solely on domestic demand.

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SK Group has plenty of affiliates — with expertise in chips, energy and telecommunications — that should help offset relatively high electricity costs by improving computing efficiency, Chung said. SK Telecom itself plans to invest 750 billion won ($567 million) in SK Hyper by 2030.

SK Hyper is developing a 900-megawatt project in the southern industrial city of Ulsan, alongside a previously announced 100-megawatt project for Amazon Web Services. It’s in talks with the government to secure additional sites, Chung said.

It’s also exploring opportunities to serve governments in Asia and the Middle East, offering computing capacity and AI models as an integrated package. Chung said SK Hyper could begin generating revenue as early as next year, ahead of the planned completion of its initial data centers in 2029.