OpenAI and Meta mention considering locations outside the United States.
Politicians increasingly support attracting the facilities to South Korea.
Others raise concerns that electricity supply and other problems would be the same.
Expected US restrictions prompt calls to attract investment
With the Democratic Party's US midterm election victory prompting expectations of tighter restrictions on artificial intelligence data center construction in the United States, calls are mounting for South Korea to seize the opportunity. However, others advocate caution, noting that concerns about an AI investment bubble persist and that South Korea faces the same adverse effects on communities, including electricity and water supply problems.
According to a November 8 report by The Wall Street Journal, OpenAI Chief Executive Sam Altman recently told employees that he understood why people did not want to live near data centers and that the company might need to consider building them in the desert. Meta President Dina Powell McCormick also recently said, “Building new data centers in the United States will become very difficult,” adding that the company was considering developing data centers outside the country.
The suggestion is that growing concerns about delays to AI data center permits and investment schedules could lead companies to look outside the United States for stable locations. Securities industry analysts and others have said this could offer an opportunity for South Korea, which has pursued data center construction to attract Big Tech companies.
Politicians also called for an active response. People Power Party lawmaker Ahn Cheol-soo wrote on Facebook, “The government should not simply watch US moves to regulate data centers, but immediately develop a strategy to attract global AI data centers,” adding, “Let us bring to South Korea the AI data center investment of global companies hesitating in the United States.” At a plenary meeting of the National Assembly's Science, ICT, Broadcasting and Communications Committee on November 6, Democratic Party lawmaker Hwang Jung-a said, “Now, while the United States is hesitating, South Korea can push ahead with the aim of securing leadership in AI.”
Government support and investment concerns
South Korea's government is actively supporting AI data center construction and easing various regulations. It has designated AI data centers as one of its three megaprojects. The Special Act on the Promotion of the Artificial Intelligence Data Center Industry, which takes effect in March 2027, contains substantial regulatory reductions, including simplified permitting procedures and exemptions from power system impact assessments outside the Seoul metropolitan area.
However, concerns about a bubble persist because profitability is not assured despite the scale of investment in the AI industry. Reports have found that dozens of US AI data center construction projects have recently been delayed or canceled, and that only 35% of planned data center projects are feasible.
Power, water and local economic effects
Some argue that South Korea should establish proper regulations rather than rush ahead indiscriminately, because it faces the same electricity and water supply problems associated with data centers.
Lee Heon-seok, a policy committee member at Energy Justice Action, said, “The direction is for KEPCO to shoulder all the enormous electricity demand and for the government to support transmission networks and water supplies, but attracting data centers indiscriminately in this way is a path to disaster.” Lee added, “We should at least introduce regulations at the level of the US Republican Party.”
The local economic benefits of AI data centers have not been demonstrated either. An industry representative said, “Data center construction may create jobs, but I do not know what economic effects there are for the region afterward.”
Original Korean article: khan.co.kr
English brief by Korea Wind Intelligence, koreawindintel.com
