Naver's shares surged over 9% in early trading after the company announced a $1 billion capital increase through a third-party allocation to Nvidia and plans to jointly build a global AI factory. This strategic partnership aims to enhance its AI infrastructure business and has improved investor sentiment, especially as Naver also plans to buy back shares.
As of 9:28 a.m. on July 27, Naver's stock was trading at 226,500 won, up 19,000 won (9.16%) from the previous trading day. The stock opened at 228,500 won and reached a high of 234,500 won during the session, before slightly retracting but maintaining a strong performance around 9%.
According to a filing with the Financial Supervisory Service, Naver will issue 7,241,564 new common shares at 204,500 won each to Nvidia as part of the $1 billion capital increase, equivalent to approximately 1.46 trillion won. This marks Naver's first third-party allocation since its listing on the KOSPI in 2008.
The initiative is designed to address the surging global demand for AI infrastructure by establishing a strategic partnership with Nvidia to jointly build a large-scale global AI factory, aiming to seize business opportunities in the global AI compute market.
Naver plans to lead the acquisition, construction, and operation of data center sites for the AI factory, while Nvidia will supply graphics processing units (GPUs).
A proposed $9 billion (approximately 13.16 trillion won) computing infrastructure will be developed by Brookfield, a global alternative investment firm. Naver has selected Brookfield as the exclusive preferred negotiator and is in discussions to finalize the contract.
Naver explained that the expected benefits of this project include securing new revenue sources through the operation of the AI factory in response to global AI infrastructure demand and identifying opportunities for future business collaboration with Nvidia to acquire the latest computing infrastructure.
However, Naver noted potential challenges, including uncertainties in securing local data center sites and regulatory environments in various countries, as well as possible delays in securing power infrastructure and fluctuations in global AI infrastructure supply, along with potential changes in contract terms or timelines during negotiations.
Naver also announced plans to buy back 4,901,094 common shares worth 1.017 trillion won on August 3.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.