Amazon, SK Group to invest $5B to build South Korea’s largest data center – report

South Korea’s SK Group will invest about 7T won (around $5.11B) including $4B from Amazon’s (NASDAQ:AMZN) cloud services provider Amazon Web Services to establish a data center in the southern city of Ulsan, Reuters reported, citing the government’s Science Ministry.

The AI data center will be the Asian country’s largest and will break ground in September. It will be fully operational with a capacity of 100 megawatts by 2029, the report added.

SK and AWS did not immediately respond to a request for comment from Seeking Alpha.

SK Group Chairman Chey Tae-won said he intends to expand the data center’s capacity to one gigawatt in the future and make it a global hub that handles local AI demand, during a meeting attended by South Korean President Lee Jae Myung and tech CEOs, according to the report.

He noted that AI was crucial for South Korea’s growth.

SK Hynix’s (OTCPK:HXSCF) stock rose about 4% in South Korea on Friday, while Amazon’s stock was largely flat premarket in the U.S.