SK Group breaks ground on AI-only data center in Ulsan

SK Group has begun construction of the country’s largest AI-only data center outside the Seoul metropolitan area, a project developed in partnership with Amazon Web Services.

Participants pose for a photograph during SK Telecom and SK Ecoplant's groundbreaking ceremony for a new AI data center in Ulsan with Amazon Web Services and city officials on Aug. 29. [SK TELECOM]

ULSAN — SK Group has begun construction of the country’s largest AI-only data center outside the Seoul metropolitan area, a project developed in partnership with Amazon Web Services (AWS).

SK Telecom (SKT) and SK Ecoplant hosted a groundbreaking ceremony in Ulsan with AWS and city officials on Friday. More than 200 people attended, including Chey Chang-won, chairman of the SK Supex Council, SKT CEO Ryu Young-sang and SK Ecoplant CEO Kim Hyung-keun.

“The SK AI data center in Ulsan will form a critical artery of Korea’s AI highway,” Ryu said in a speech. “If global partners join in, Korea can position itself as the AI hub of the Asia-Pacific region.”

The facility is designed to global standards, with AI-optimized computing structures, hybrid cooling systems and high-reliability networks. Construction will begin in the third quarter of this year, with operations starting in phases by late 2027.

AI data centers handle high-intensity computing, requiring far greater electricity, cooling and networks than traditional facilities. A single server rack can consume 20 to 40 kilowatts of power, compared to 5 to 10 kilowatts at standard centers. Cooling capacity is four to 10 times higher, reflecting the heavy GPU workloads.

The project signals Korea’s growing clout in AI infrastructure.

AWS, the world’s largest cloud provider, agreed to invest after confirming SK’s ability to manage operations, construction and energy supply. The deal also secures data sovereignty for domestic AI foundation models.

SK Telecom CEO Ryu Young-sang speaks during the groundbreaking ceremony for its new AI data center in Ulsan on Aug. 29. [YONHAP]

According to SK Group, competition across Northeast Asia was fierce. The final choice of Ulsan followed direct talks between SK Chairman Chey Tae-won and Amazon CEO Andy Jassy. Chey proposed the project during a U.S. visit in June 2024 and met Jassy three more times before an agreement in March this year.

The economic impact is expected to be significant. SK projects more than 78,000 jobs and 25 trillion won ($18 billion) in economic benefits over 30 years. Ulsan’s LNG infrastructure gives the site an edge: SK Multi-Utility will supply low-cost power from SK Gas, while combined heat and power systems will help cut emissions.

SK plans to expand AI applications into agents, robotics and manufacturing. It also aims to build gigawatt-scale AI data centers.

“Corporate survival depends on how deeply we integrate AI,” Chey said at a June strategy meeting. “We must push beyond information technology into every sector where AI can extend our reach.”

BY PARK JONG-SUH [yim.seunghye@joongang.co.kr]