![]() ![]() The announcement indicates that the two data centers are projected to open as early as 2024. (Note: Investment numbers for the AI semiconductor industry between the September 2022 budget and today’s news vary not just because of the timescales, but because the funds cover various projects, and these have different timelines.)Īs its first project, Seoul will hire AI chipmakers and cloud companies as early as April for two data centers, known as neural process unit (NPU) farms, which will only use domestic AI chips. AI is a big part of that vision: Seoul at the time set aside approximately $795.3 million (1.02 trillion won) for AI semiconductors and $235.3 million (301.8 billion won) for next-generation AI from 2022 to 2026. Unveiled in September 2022, the government’s digital strategy budget places bets on six major technologies - AI, AI semiconductors, 5G and 6G communication, quantum, metaverse and cybersecurity. ![]() Today’s announcement is part of the country’s bigger digital strategy plan. ![]() South Korea’s advantage is that it’s already a behemoth: It’s not just the home to several iconic mobile brands and services, but it’s also a major supplier of components for an even longer list of players. and others explore how they too can do more in the advanced chip race. Indeed, South Korea’s efforts are not alone - they come as Japan, India, the U.S. There is a long-lingering question mark over what role China will play in the years ahead in the world of hardware and advanced technologies - something that has geopolitical as well as economic implications - and that’s spurring R&D and ambitions from a wider set of countries to complement and indeed compete better with China in the tech industry. All that AI data crunching, however, needs immense processing power: Cue an opportunity and demand for better chips and architectures to run those services more efficiently, and a subsequent race among companies and countries to be the ones to meet that demand.Īdded to that is South Korea’s macroeconomic potential. For one, there is the current OpenAI/ChatGPT frenzy: Recent advances in generative AI point to a future where AI could create a new wave of services and make existing processes more efficient, and so a lot of consumers and organizations - tech and non-tech - are considering how this could work for them. The news touches on a couple of notable currents in the world of tech right now. The investment will involve building new data centers, and working with AI chip startups and cloud service providers, among other projects. It has raised 122 billion won ($96 million), including 30 billion won from KT in a funding round joined by Singapore's Temasek Pavilion Capital and 10 billion won grant from the South Korean government.South Korea hopes to be a key player in fulfilling the new global demand for next-generation AI chips, and today the government put some money where its mouth is: The country’s Ministry of Science and ICT said it would earmark $642.5 million (826.2 billion won) through 2030 to invest in companies working on advanced AI chips. Rebellions declined to give a forecast for its AI chip venture. "Amid high dependence on foreign GPUs (graphics processing units) globally, the cooperation between KT and Rebellions will allow us to have an 'AI full stack' that encompasses software and hardware based on domestic technology,” said KT vice president Bae Han-chul. ![]() Rebellions will seek to participate in the government project in a consortium with KT Corp (030200.KS), a big Korean telecom, cloud and data centre operator, in the hopes of weaning Nvidia customers off the U.S. "But government incentives such as what's happening in Korea could well affect the market share within Korea." These startups have got to build momentum, so that will take time," said Alan Priestley, an analyst at IT research firm Gartner. "There's a lot of momentum behind Nvidia's developments. Sapeon Korea Inc also plans to participate in the project, the SK Telecom Co (017670.KS) subsidiary said.įuriosaAI, backed by South Korea's top search engine Naver Corp (035420.KS) and state-run Korea Development Bank (KDB.UL), told Reuters it will also bid. Without such support, he said, data centres and their customers would likely stick with Nvidia chips. "The government is twisting the arm of the data centres and telling them, 'Hey, use these chips'," Rebellions' Park, a former Morgan Stanley engineer, told Reuters. In a country whose firms supply half the world's memory chips, the authorities want to create a market that can be a test bed for AI chipmakers, aiming to foster global competitors. Seoul will put out a notice this month for two data centres, called neural processing unit farms, with only domestic chipmakers allowed to bid, an official at the Ministry of Science and ICT told Reuters. ![]()
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