Swift announcement of measures to coexist with local communities
Big Tech begins responding to US political changes
South Korea also plans 18.4GW of data centers
Concerns over a possible mismatch between supply and demand
Discussions with global customers alongside development
President Lee Jae Myung delivers remarks at the Ulsan AI Data Center launch ceremony at the Ulsan Exhibition and Convention Center on June 20.
OpenAI said on November 5, local time, that it would cover all electricity bills and power infrastructure costs for artificial intelligence (AI) data centers it directly owns and operates. The aim is to prevent costs from being passed on to other electricity consumers. As the Democratic Party's sweeping victory in the US midterm elections strengthened expectations of a slowdown in AI data centers, the company moved quickly to announce measures for coexistence with local communities.
OpenAI also said it would end its practice of requiring local public officials to sign nondisclosure agreements preventing them from releasing information about data center construction. It proposed applying rules similar to its announcement across Big Tech. OpenAI and other Big Tech companies that have committed large sums to AI investment appear to be accelerating preparations to respond to changes in the US political landscape. According to foreign media reports, Meta is reviewing options to locate data center construction outside the United States or expand existing facilities. Microsoft canceled a data center agreement with British neocloud company Nscale in October.
Several companies in South Korea have also been pursuing large-scale AI data center investments. The government's "three mega-projects," announced in June, included plans to build 8.4 gigawatts (GW) of AI data center capacity by 2029. SK was assigned 5GW, GS 2.4GW and Naver 1GW. Including SK's expansion phase through 2035 brings the total to 18.4GW.
Construction of LG Uplus's 200-megawatt (MW) AI data center is underway at a site in Paju, Gyeonggi Province, on August 5.
Experts said immediate demand needs to be distinguished from long-term investment targets. At a public forum held by the National Economic Advisory Council on November 2, Jung Byung-sun, a professor at Sogang University's Graduate School of Management of Technology, said confirmed AI data center demand currently stands at about 2.5GW, including long-term customer contracts, the National AI Computing Center and companies' own use. Under these circumstances, Jung said, "It is difficult to explain the 18.4GW target." Yoon Dae-kyun, director of Ajou University's AI research institute, also criticized the targeted scale of data centers, saying, "There is insufficient evidence of which users will need how much computing capacity and for what purposes."
Companies are also voicing concerns. A technology industry representative said, "Some expect domestic AI data center demand in the near term to reach at most about 3GW," adding, "Unless major global customers are attracted to South Korea, supply and demand could diverge."
Mindful of these concerns, South Korean companies investing in AI data centers are conducting customer discussions alongside each stage of development. SK Telecom said its subsidiary SK Hyper is discussing terms with potential customers, primarily for Ulsan, and will proceed with development once those terms are finalized. LG Uplus said it has already secured some customers for its 200-megawatt (MW) AI data center under construction in Paju, Gyeonggi Province. Ultimately, securing customers would be crucial to turning construction plans into operating facilities.
Original Korean article: Hankook Ilbo
English brief by Korea Wind Intelligence, koreawindintel.com
