It has been confirmed that global companies are searching for firms that can complete artificial intelligence (AI)-specialized data centers (AIDCs) within two years. This is aimed at quickly responding to the expanding demand for AIDCs driven by the explosive surge in AI services.
While an increasing number of Big Tech companies are looking for data center locations as hubs in Asia, the prevailing forecast is that South Korea will be excluded from the options under its current data center construction speed, which takes up to four to six years at the longest. This is why some point out the necessity of actively attracting them through institutional improvements.
According to the industry on the 15th, Company A, a U.S. Big Tech firm, was recently found to be looking for a company in the Asian market, including South Korea, that can complete an AIDC within two years and even operate AI infrastructure such as graphics processing units (GPUs). An official from a cloud company stated, “Multiple Big Tech companies reviewing data center locations in South Korea are not interested in data centers that will be completed three years later,” adding, “They are looking for companies that can implement workloads and finish all stability tests within two years, constructing an AIDC that runs 24 hours a day immediately upon completion.” They also present the provision of customized infrastructure, such as large-scale clusters based on Nvidia's next-generation GPU development roadmap like 'Vera Rubin', as a prerequisite. They need an AIDC that can be utilized for AI purposes immediately upon completion.
Based on a 40MW AIDC, the trend in the U.S. and Europe is to build a data center in just one to two years. In South Korea, it usually takes about 3.5 to 5 years to build a data center. The general consensus in the industry is that the country needs to loosen laws and systems, even if temporarily, to expand AIDCs--which are essential infrastructure to leap forward as an AI powerhouse--and to globalize the business. According to the Korea Data Center Council (KDCC), it currently takes an average of 3.5 years from planning to completion of a data center, which proceeds in the order of site securing, feasibility review, design, licensing, power supply contracting, construction, and completion. AIDCs require up to four to six years due to meeting power demand and other factors. It is an environment that cannot accommodate Big Tech companies' demands for construction within two years.
With the recent enactment of the Special Act on AIDCs by the National Assembly, room has been created to shorten the AIDC construction schedule through batch processing of licensing and relaxation of facility installation standards. However, a common criticism is that solutions for securing power or responding to civil complaints have not been materialized. An industry official said, “Normally, 1 year and 6 months to 2 years is enough time for data center construction,” but noted, “It takes 2 to 5 years for power consultation and grid securing, and 4 to 7 years when a new substation needs to be built, but even if the Special Act on AIDCs takes effect, it cannot resolve these problems.” The industry worries that unless the power issue is resolved, South Korea might not even be able to start competing for the Asian data center hub against Japan and Singapore. In particular, the Japanese government views data centers as national digital and economic security assets and is active, providing tax benefits and subsidies to expand AIDCs within its country and attract overseas data centers.
Representative Hae-min Lee, member of the National Assembly (Rebuilding Korea Party), emphasized, “When considering where to invest in AIDCs in the Asia-Pacific region, we end up competing with Australia, Indonesia, and even Taiwan,” and added, “In the past, price was also important, but these days, stable power is the number one priority. To be competitive, an amendment to the AIDC Act is necessary, including special provisions for direct Power Purchase Agreements (PPAs).”
