SK Telecom established SK Hyper last month as a dedicated AI data center development subsidiary, committing an initial 3,300 billion won with plans to invest an additional 4,200 billion won based on project progress. The new entity will pursue individual AI DC projects through external financing from financial investors and project financing, aiming to maintain financial health while securing leadership in large-scale AI infrastructure development. SK Group's strategy addresses the rapid growth in global AI infrastructure demand by prioritizing land acquisition, power supply, and customer contracts before construction.
SK Hyper Secures Land, Power, and Customers for AI Data Centers
SK Hyper, a 100% subsidiary of SK Telecom, is responsible for acquiring land with power reception capacity and constructing substations necessary for AI data center construction. After securing suitable sites, the company will attract customers to lease the facilities. Park Jong-seok, Chief Financial Officer of SK Telecom, stated that "through SK Hyper, a specialized AI DC business development company, we aim to respond to market changes and requirements and secure execution capability to pursue business faster than anyone else, thereby achieving overwhelming competitiveness in the AI DC business."
The first project is the AI data center under construction in Ulsan. SK Telecom secured Amazon Web Services (AWS) as the anchor tenant for the 100-megawatt Ulsan facility. The company agreed to transfer 49% equity stake in the project entity to financial investors, specifically private equity firm Kohlberg Kravis Roberts (KKR) and a consortium of IMM Investment and Stonebridge Capital.
SK Plans 5GW by 2029 and 15GW by 2035
SK Hyper plans to sequentially open 5 gigawatts of AI data center capacity by 2029 following the Ulsan project. The company announced plans to develop 15GW of AI DC capacity by 2035, considering market demand. SK Group previously announced it would invest 140 trillion won to build 2GW of AI data centers in the Yeongnam region including Ulsan.
According to AI research institution Epoch AI, constructing a typical 1GW-class data center requires $38 billion (53.8 trillion won). The industry forecasts continued growth in mid- to long-term AI infrastructure demand due to structural changes as AI adoption expands across public and industrial sectors.
SK Hyper Attracts External Investors for Ulsan Project Financing
SK Hyper will execute initial investment funds and procure remaining capital through financial investors and project financing. The company's primary principle is to secure customers first before constructing AI data centers, planning to flexibly respond based on customer demand and proceed with projects sequentially until reaching the first-stage target of 5GW.
Park Jong-seok explained that "AI DC business involves investments of considerable scale, and directly investing the entire planned amount has realistic limitations. Going forward, we will secure external investment to the maximum extent possible and proceed with direct investment at a level that maintains financial structure soundness and stable dividends."
FAQ
What is SK Hyper's timeline for AI data center development?
SK Hyper plans to open 5GW of AI data center capacity by 2029 starting with the Ulsan project, and aims to develop 15GW by 2035 based on market demand.
How is SK Telecom financing the AI data center projects?
SK Telecom invested an initial 3,300 billion won in SK Hyper with plans for an additional 4,200 billion won. For the Ulsan project, the company secured external financing by selling 49% equity to KKR and the IMM Investment-Stonebridge Capital consortium, with remaining capital to come from financial investors and project financing.
