Korea looks to plug into the global AI race with $5 billion Ulsan data center

In a bold play to secure Korea’s position among the global AI elite, President Lee Jae Myung kicked off his term with a visit to the launch site of a mega-scale AI data center — signaling that Korea’s next industrial revolution will be fueled by AI.
 
At the Ulsan Exhibition and Convention Center on Friday, President Lee joined SK Group and Amazon Web Services (AWS) to unveil plans for a 103-megawatt AI data center in the Mipo National Industrial Complex. Backed by an estimated 7 trillion won ($5.11 billion) investment, the facility is poised to become the country’s largest of its kind upon completion.

“Just as the Gyeongbu Expressway drove Korea’s industrial rise, this AI data center marks the start of a new digital expressway,” Lee declared during the launch ceremony. He pledged sweeping tax benefits and regulatory reforms to catalyze private-sector investment and “ensure Korea leads the great AI transition.”
 
Lee emphasized that Korea has achieved rapid economic growth until now, but the country is currently climbing over what people call a “strenuous hill.”  

“Depending on our preparation, we either advance to a new world or regress,” he added.  
 
Before the ceremony, Lee met with industry leaders, including SK Group Chairman Chey Tae-won, Kakao CEO Chung Shin-a, Samsung SDS CEO Lee June-hee, FuriosaAI CEO Baek Joon-ho, LG AI Research Institute Director Bae Kyung-hoon and Naver Cloud CEO Kim Yu-won. The discussion was moderated by AI Future Planning Senior Secretary Ha Jung-woo.
 
During the discussion, Chey called on the “government to become a direct buyer in the AI market,” arguing that public-sector demand alone could generate a 5 trillion won market over five years. He also proposed expanding AI voucher programs, launching an AI startup fund, nurturing national AI talent and designating Ulsan as a special AI zone. Lee responded positively to the education proposal, saying “curriculum reform is worth considering.”
 
Lee also offered personal commendations, thanking Chey for “the bold investment in the AI data center in Ulsan” and praised Kakao’s Chung for “leading Korea’s industrial economy with exceptional skill.”
 
President Lee’s visit coincided with the Kospi index breaking past 3,000 for the first time in three and a half years.  
“Let’s hope this rekindles investor confidence,” the presidential office quoted him as saying.

The planned AI data center in Ulsan will house 60,000 high-performance GPUs, meeting surging demand for AI infrastructure. It joins a wave of major domestic data center investments. Alibaba Cloud on Thursday announced it will launch its second center in Seoul and LG U+ also announced in April that it will build a 615.6 billion won AI-focused center in Paju, Gyeonggi.  
 
But demand continues to outpace supply. McKinsey forecast that global data center demand to grow up to 22 percent annually from 2023 through 2030, with AI-specific demand projected to soar by 33 percent per year. Grand View Research estimates the global data center market will hit $437.3 billion by 2030.
 
Even the United States faces capacity shortfalls, prompting the launch of its historic Stargate AI infrastructure project earlier this year.  

“With construction of data centers taking over three years, the race to invest starts now,” said one cloud industry official.
 
Korea currently hosts just 43 data centers — dwarfed by the United States, which has 5,426, Germany with 529 and China with 449, according to Statista. The government’s “AI expressway” vision aims to close that gap with strategically located centers nationwide.
 
Yet building these centers has proven fraught. Power supply issues, GPU shortages and local permit battles have all posed obstacles. Naver’s 2019 effort to build one in Yongin was derailed by resident opposition, forcing a move to Sejong City.
 
By contrast, SK Group’s Ulsan project is viewed as a logistical win. The nearby SK Gas LNG cogeneration plant ensures a stable power supply — no small feat in an industry where electricity constraints are a chronic headache.  
 
“Power access is a fundamental bottleneck,” said Kim Soo-hyun, senior researcher at the Korea Data Center Council. “Community opposition to these centers as ‘unpleasant facilities’ only compounds the challenge.”
 
The government sees this launch as a turning point, with broader plans to expand tax credits and other incentives to support the AI ecosystem nationwide.

Translated from JoongAng Sunday using generative AI and edited by Korea JoongAng Daily staff.
BY YOON SUNG-MIN, KANG KWANG-WOO [[email protected]]