SK Group, Nvidia deepen alliance to build 'AI factories' in S Korea

SK Group and Nvidia are expanding their partnership beyond memory chips to build "AI factories" in South Korea. The deepened alliance aims to bolster the country's AI infrastructure, with SK Telecom set to lead the initiative.

SK Group, Nvidia Expand Alliance to Build 'AI Factories'

SK Group and Nvidia are expanding their chip alliance into artificial intelligence infrastructure, as SK Group Chairman Chey Tae-won and Nvidia CEO Jensen Huang unveiled plans to deepen cooperation beyond memory chips. The two companies plan to build what they refer to as "AI factories" in South Korea, moving their long-running partnership into the global AI infrastructure race.

According to a news report by The Korea Herald, the leaders laid out the plan during a joint briefing at SK Group's headquarters in central Seoul. The expanded alliance signals a broader connection that moves past the high-bandwidth memory chips that tied the two companies together during the recent AI boom.

Partnership Elevated to Group Level

SK Telecom is expected to play the central operating role, pushing ahead with plans to build what the group describes as Asia's largest AI infrastructure platform.

"Most of our cooperation so far has been centered on memory, but from now on, we will raise the partnership to the SK Group level," the news report quoted Chey. "We will build future AI factories together with Nvidia."

Chey stated that the term AI factory refers broadly to AI data centers and related infrastructure, including the semiconductor fabs of SK hynix.

The two companies reviewed an AI infrastructure road map and agreed to expand cooperation across the entire SK Group to better respond to fast-changing demand for AI computing.

Nvidia CEO on Surging AI Demand

Huang stated that demand for AI infrastructure is rising rapidly worldwide, describing the industry as still in the early stages of a much larger buildout.

"We're seeing great demand, the businesses booming around the world for more AI factories. And so that's the reason why we're entering this partnership, so that we could extend our partnership, increase the scale of our partnership quite substantially," the report quoted Jensen Huang. "We're at the beginning of the AI infrastructure build-out, and the future is quite bright."

Huang highlighted South Korea as a market where AI infrastructure will become increasingly important for future growth.

"SK Telecom and Nvidia have a partnership to build AI factories here in Korea," Huang said. "AI factories are essential for the population of Korea, education, the universities, the scientific labs, but also the startup companies and the industries themselves, just like electricity, just like water, just like the internet."

Huang noted that South Korea currently possesses very little AI infrastructure, which remains essential to future advancement. "South Korea needs AI infrastructure today. It has very little. As one of the world's leading ecosystems for AI, I assure you AI infrastructure will be essential to the advancement in the future," Huang said. "Just as we needed fabs for semiconductors, we need AI fabs for AI, and so SK Telecom is going to help build that."

Strengthening the SK hynix-Nvidia Bond

For SK hynix, the announcement reinforces its position as a key supplier to Nvidia. According to SK hynix's quarterly report, sales to Nvidia reached about 7.78 trillion won (USD 5.05 billion) in the first quarter of this year, making Nvidia its largest single customer.

"Without SK, today's AI industry would not have developed as wonderfully as it has. Our mutual business today is booming. We are also expanding our partnership to include many new markets," Huang said.

Huang added that SK hynix has been Nvidia's largest memory partner. "SK hynix will continue to be Nvidia's largest memory partner, and this is a partnership and a friendship that has gone back a long time," he said.

Chey responded by affirming the supply relationship between the two semiconductor firms. "We are doing everything we can to ensure a stable supply of chips to Nvidia," Chey said. (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)