Nvidia’s Major Investments in South Korean AI Ecosystem
Nvidia is pouring $1 billion into South Korea’s AI infrastructure through Naver and SK Group. Jensen Huang called it the golden age for Korea as the deals, announced during President Lee Jae Myung’s Silicon Valley visit, span data centers, memory chips, and AI supercomputers.
Key Announcements:
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Investment in Naver: Nvidia will invest $1 billion in Naver to help finance an AI data center under construction in South Korea. The facility will utilize Nvidia’s AI computing hardware. Brookfield has agreed to a nonbinding term sheet to fund up to $9 billion for the project.
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Partnership with SK Group: Nvidia announced a long-term commercial partnership with SK Group valued at over $500 billion. This includes spending on memory chips from SK Hynix, as well as purchases of Nvidia supercomputers by SK Group. SK Telecom will build over 2 gigawatts of AI data centers on the Korean Peninsula, with the first expected to open next year.
Context:
These announcements coincide with South Korean President Lee Jae Myung’s visit to Silicon Valley and further tech deals between Korean and American companies.
Huang highlighted South Korea’s strong semiconductor industry as a reason for investment, emphasizing its crucial role in global AI data center buildout, especially with Samsung and SK Hynix being the only two companies globally capable of producing advanced memory chips required by Nvidia’s processors.
Criticisms:
Critics have labeled Nvidia’s investment strategy as circular financing, where they invest in companies that subsequently purchase their hardware. This pattern has been replicated in deals with data center operators, neoclassic clouds, and now sovereign AI partners.