In order to attract global big tech companies to South Korea's Artificial Intelligence Data Center (AIDC) market, tax incentives are necessary, and excessive grid code regulations should be avoided, according to Lee Young-tak, Vice President of SK Telecom (SKT).
Lee made these remarks on October 21 during a seminar titled 'Korea's AI Sovereignty and Global Competitiveness: AIDC Laws, Policies, and Industrial Strategies' held at the Korea Telecommunications Operators Association (KTOA) headquarters in Gangnam, Seoul.
He emphasized that SKT has not received any tax benefits related to AIDC over the past year. Although the government has included AI as a national strategic technology and proposed a 15% tax credit for AIDC investments, it has been difficult to apply these benefits in practice.
"Currently, AIDC is more often provided as a rental service to external customers rather than being used directly by companies," Lee explained. He noted that colocation services are excluded from tax credit eligibility. He added, "Colocation, which produces and exports AI computing resources rather than self-consumption, is the mainstream of the data center industry, and it should also receive a certain level of tax benefits."
Lee also addressed the regulatory burdens associated with the introduction of a dedicated AIDC grid code. The grid code sets technical standards that power plants and large energy-consuming facilities must comply with when connecting to the power grid, aimed at maintaining stable voltage and frequency even during system anomalies.
In August, the Ministry of Climate, Energy, and Environment announced the launch of an AIDC research group and plans to promote the AIDC grid code within the year.
Lee pointed out that if grid code regulations are tightened and many energy storage systems (ESS) are installed, it could lead to increased costs and difficulties in securing land. He acknowledged the necessity of grid codes for the stability of the power system due to the large power consumption but cautioned that excessive regulations should not hinder attracting global big tech investments to Korea.
He highlighted Korea's suitability for the AIDC industry, citing its ability to provide high-quality power reliably, along with its geographical advantages and construction capabilities. He projected that the AIDC industry in Korea could generate an economic impact of 3.5 trillion won, create 1.3 trillion won in added value, and provide direct employment for 200 to 300 people per 100 megawatts (MW).
Lee stated, "This is Korea's golden time to capture foreign big tech in the global AIDC industry," expressing optimism that seizing this moment could create a lock-in effect.
Meanwhile, SKT is collaborating with Amazon Web Services (AWS) to establish a 100 MW AIDC in Ulsan. The company plans to expand this to 900 MW, aiming for a total capacity of 1 gigawatt (GW). By 2029, SKT intends to gradually open a 5 GW AIDC and aims to reach 15 GW by 2035, making it the largest in Asia.
* This article has been translated by AI.
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