SK Telecom pumps $200 million into Smart Global Holdings in largest-ever AI investment

SK Telecom plans to invest $200 million in Smart Global Holdings, marking its largest AI-related investment ever. The two companies will collaborate to establish AI-related infrastructure.

SK Telecom CEO Ryu Young-sang, left, and Mark Adams, President and CEO of Smart Global Holdings, pose for a photo after signing an investment deal. [SK TELECOM]

SK Telecom will invest $200 million into U.S. enterprise technology company Smart Global Holdings through stock purchases in a continued commitment to the growing AI industry.

It marks the largest AI-related investment ever made by the company.

The California-based Smart Global Holdings' offerings include the products and services required to create and maintain data centers.

SK Telecom will purchase $200 million worth of the firm's preferred stocks which will later convert into ordinary shares. They will translate into 10 percent of the company stocks.

The two companies agreed to collaborate in establishing AI-related infrastructure, SK Telecom said Tuesday, particularly through the U.S. firm's Penguin Solutions brand.

“Our investment in and cooperation with Smart Global Holdings will give us an opportunity to boost our position in the AI value chain,” SK Telecom CEO Ryu Young-sang said in a release.

“In the era of AI transformation, we plan to continue to collaborate and make proactive investments to achieve global leadership in AI.”

SK Telecom, Korea's No. 1 telecommunication firm, pledged to transform into a “global AI company” last year with a focus on infrastructure, semiconductors and service.

It has committed at least $300 million to AI-related business since last year, including generative AI company Anthropic, cloud service provider Lambda and search engine Perplexity.

In the semiconductor sector, SK Telecom is pushing for the merger of Sapeon — of which it owns 62.5 percent — and chip designer Rebellion.

Aside from the latest investment in Smart Global Holdings, SK Telecom hopes to collaborate with Lambda on “GPU as a service” technology and to invest in building data centers in Korea.

In service sector, SK Telecom is banking on its flagship A. platform that offers AI-based translation and summary.

Its membership in Global Telco AI Alliance, alongside players like Deutsche Telekom, Singletel and SoftBank, will help SK Telecom spearhead the global AI market and address its demands, the company said.

“We are thrilled to have SK Telecom as a strategic investor,” said Mark Adams, president and CEO of Smart Global Holdings, in a release Tuesday.

“Today’s announcement is a testament to Penguin Solutions’ capabilities in the deployment of AI factories at scale through our systems, software and managed services suite of solutions. We look forward to executing on these strategic collaboration opportunities with the SKT team and believe they will create value for our respective stakeholders.”

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]