Hanwha Energy to invest $1.45 bn in super-large AI data center

Hanwha Energy’s solar power plant in Texas, U.S. [Courtesy of Hanwha Energy Corp.]

Hanwha Energy Corp., a core energy affiliate of South Korea’s Hanwha Group, is set to enter the artificial intelligence (AI) data center business in the United States. Riding the AI wave, the company aims to dominate the AI data center market based on eco-friendly energy.

According to sources from the power generation and energy industry on Sunday, Hanwha Energy plans to build a 200-megawatt (MW) super-large AI data center capable of operating hundreds of thousands of servers in the northwestern region of Texas, with an estimated investment of 2 trillion won ($1.45 billion). The company plans to start constructing the center in 2025 after securing the power system and water supply, including transmission and distribution networks.

Hanwha Energy is currently engaged in the power trading business in Texas, where it operates a 2-gigawatt (GW) solar power plant. If Hanwha, whose strength lies in supplying renewable energy, successfully enters the U.S. data center business, it is expected to create significant synergies.

Big tech companies such as Google LLC, Apple Inc., Meta Platforms Inc., and Microsoft Corp. are eager to secure super-large AI data centers for generative AI operations, and they also need to expand their use of eco-friendly energy to achieve their RE100 (100 percent renewable energy use) goals.

“Hanwha’s ‘package deal,’ which offers eco-friendly power and AI data centers together, will be an attractive proposition for big tech companies,” a senior energy industry official said.

Hanwha Energy aims to build the super-large AI data center and lease it to U.S. big tech companies, sources said. If this venture is successful, the company is expected to generate 10 trillion won in sales over the next 20 years from rent and electricity usage fees. However, it remains to be seen whether the company, which has sales of 4.7 trillion won, can seize this opportunity to secure a new growth engine via its entry into the U.S. data center business.

“The number of companies wanting AI data centers with a capacity of several hundred megawatts is rapidly increasing in the United States,” an industry insider said. “This business model is quite appealing to Hanwha, with its expertise in renewable energy business and power trading.”