• SK Telecom’s parent company has teamed up with hyperscaler Amazon Web Services (AWS)
• They will jointly develop and build a new datacentre in Ulsan, South Korea, that will be part of an AWS ‘AI zone’
• The development is part of the AI infrastructure superhighway strategy announced in 2024 by SK Telecom

SK Group, the parent of telecom and AI service provider SK Telecom, has struck a 15-year partnership with hyperscaler Amazon Web Services (AWS) to develop and build a new datacentre in Ulsan, South Korea, that will be the foundational cloud infrastructure facility of an AWS ‘AI zone’ as well as a key part of SK Telecom’s AI infrastructure superhighway plans.

The development is the latest example of a sovereign cloud/AI development that includes the participation of a telco. SK Group noted in this announcement that it “plans to enhance data sovereignty and strengthen its global competitiveness in AI by processing AI workloads generated in South Korea directly within the country”.

The development will bring welcome relief to SK Telecom which, after a few years of generating AI strategy headlines and evolving into an AI-native telco, has been under fire in recent months following a disastrous data breach, first uncovered in April, that resulted in the loss of customers, mounting costs and a damaged reputation. 

Now, though, there’s something positive to highlight and it’s no surprise that the news is AI related. SK Telecom has been referring to itself as an ‘AI company’ for about two years now and in December 2024 revamped its operations, portfolio and structure to reflect its planned future as a provider of communications and AI services – see SK Telecom revamps for the AI era. 

Just prior to that, in November 2024, the operator unveiled its vision for an AI infrastructure superhighway, which is based on three pillars – a national network of regional AI datacentres, the deployment of edge AI infrastructure, and a GPU-as-a-service (GPUaaS) offering to enterprise and government users. SK Telecom also envisages the expansion of its AI infrastructure services into other geographic markets via high-capacity submarine network links in collaboration with partners. 

The new datacentre facility in Ulsan, which is in the south-east of the country, is part of that domestic AI datacentre pillar. The new AWS AI zone will “help organisations in South Korea build innovative and new AI applications locally while leveraging the full breadth of AWS capabilities,” including IT infrastructure, networks designed for “faster AI training and inference” and a range of supporting services, such as Amazon SageMaker (a managed machine learning service) and Amazon Bedrock (managed access to multiple large language models), and AI application services such as Amazon Q (enterprise GenAI assistant platform). SK Group will lead the construction of the datacentre, while AWS will “establish the AI zone,” noted SK Group, adding that “the project brings together key SK Group affiliates, including SK Telecom, SK Broadband, SK Hynix, SK Gas, SK Chemicals, SK Multi Utility and SK AX, uniting the group’s core competencies across ICT, energy and semiconductors.”

Construction of the 100 megawatts datacentre will begin in September this year and the facility is expected to start operations in 2027: About 78,000 direct and indirect jobs are expected to be created as a result of the development. According to South Korea’s ICT Ministry, SK Group is allocating 7tn won ($5.1bn) to the development and construction of the facility, of which about $4bn will come from AWS. That investment is in addition to AWS’s long-term $5.88bn planned investment in South Korea by 2027, noted SK Group.

“When SK Group’s exceptional technical capabilities combine with AWS’s comprehensive AI cloud services, we’ll empower customers of all sizes and across all industries here in Korea to build and innovate with safe, secure AI technologies,” stated Prasad Kalyanaraman, VP of infrastructure services at AWS. “This partnership represents our commitment to Korea’s AI future, and I couldn’t be more excited about what we’ll achieve together,” added Kalyanaraman.

SK Group chairman Chey Tae-won stated: “The Ulsan AI Datacentre is the core infrastructure and starting point of Korea’s AI strategy. We will work to combine cooperation with global companies and our own capabilities so that Korea can move beyond being a simple AI demander to becoming a country that exports the AI ​​industry… If Ulsan was the centre of manufacturing in the past, it will become a powerful new engine of the AI ​​highway in the future.”

SK Telecom noted in this announcement (in Korean) that AI datacentres are significantly different from existing datacentres as, unlike general datacentres for general computing environments, “AI datacentres require GPU-centric hardware, water-cooling [as opposed to air cooling], and high power demands for high-performance AI computing environments.”

- Ray Le Maistre, Editorial Director, TelecomTV