Samsung SDS and LG CNS have reported positive results in their artificial intelligence (AI) and cloud businesses, driven by increasing demand for corporate AI transformation (AX). As the domestic system integration (SI) industry expands into AI data centers and graphics processing unit (GPU) services, external business targeting finance, public sectors, and manufacturing is also growing.
According to industry sources on July 31, LG CNS recorded second-quarter revenue of 1.52 trillion won and operating profit of 127.9 billion won, marking a 4.2% increase in revenue compared to the same period last year. However, operating profit decreased by 9.2%, attributed to strategic investments for future growth and the postponement of some project contracts to the second half of the year.
Samsung SDS reported provisional second-quarter revenue of 3.72 trillion won and operating profit of 231.8 billion won, reflecting growth in IT services and logistics, with increases of 5.9% and 0.7%, respectively, year-on-year.
As demand for AI infrastructure and operational systems from businesses and public institutions rises, both companies are expanding their external business. The SI sector is evolving from system construction to providing AI computational resources and operating data centers. Samsung SDS is focusing on computational resource services and financial and public AX, while LG CNS is expanding its business around data center design, construction, and operation (DBO) as well as manufacturing and logistics AX.
Samsung SDS is enhancing its competitive edge by focusing on an 'AI full stack' that encompasses AI infrastructure, AX, AI services, and AI platforms and solutions. The growth in IT services during the second quarter was primarily driven by cloud services, which saw a 5% increase in revenue to 1.76 trillion won.
With rising demand for GPU services from Samsung Cloud Platform and public and external clients, revenue from cloud service provision increased by 24%. The expansion of AX in the financial sector and enterprise resource management in shipbuilding also contributed to a 17% growth in cloud management services. Notably, external cloud revenue surged by 75% compared to the previous year.
In the first half of the year, LG CNS's AI and cloud revenue reached 1.67 trillion won, a 5.1% increase year-on-year. Major AI data center projects in Samseong and Jukjeon, along with AX in finance and public sectors and smart factory automation in manufacturing and logistics, contributed to this growth.
LG CNS has been expanding its DBO business, which involves designing, constructing, and operating data centers. In the first half, it secured over 1 trillion won in large DBO contracts and introduced modular AI data centers that shorten construction periods. Smart factory projects previously secured in defense and shipbuilding sectors also converted into revenue during the first half.
Both companies plan to continue expanding their AI infrastructure and AX businesses in the second half of the year. Samsung SDS aims to enhance its AI infrastructure services based on GPU and neural processing units (NPU), while LG CNS plans to broaden its scope in DBO and overseas AX projects.
In July, Samsung SDS launched a subscription service based on its domestic NPU 'Renegade' from FuriosaAI, expanding its AI computational infrastructure offerings. In the long term, it aims to increase its current AI infrastructure capacity from 110 megawatts (MW) to 230 MW by 2029, and to over 800 MW by 2031, including its DBO business.
LG CNS plans to complete its AI data center in Indonesia in the second half of the year to establish a reference for its overseas AI data center business, using it as a stepping stone for additional contracts. For its overseas AX business, it intends to expand manufacturing AX in North America and financial digital transformation projects in the Asia-Pacific and Japan regions.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.