SK Telecom invests $200M to become global AI company
South Korea’s largest service provider, SK Telecom, has invested $200 million in Smart Global Holdings (SGH), an integrated data center solution provider, to offer new services to its customers. This is one of the largest artificial intelligence (AI) investments SK Telecom has made in an AI company to advance in the global AI infrastructure market.
Smart designs, builds and operates AI clusters consisting of large-scale graphic processing units (GPUs) servers for hyperscalers like Meta, among others. Based in Silicon Valley, Smart recorded a revenue of $1.44 billion last year.
As per the terms of the agreement, SK Telecom will invest $200 million in SGH by acquiring 200,000 preferred shares. “The 200,000 preferred shares are convertible into ordinary shares of SGH at a conversion price of $32.81 per preferred share, subject to adjustment upon the occurrence of certain events,” the company stated in a press release about the deal.
Betting on AI
AI is an important part of SK Telecom’s future strategy. It revealed the AI Pyramid Strategy about a year back with the target of becoming a global AI company. The AI Pyramid Strategy focuses on three areas of AI infrastructure, AI transformation and AI service.
“It is designed to foster innovation in the AI ecosystem by leveraging SKT’s technological capabilities and strategic partnerships," Mina Ryu, senior manager of strategic PR at SK Telecom, told Fierce Network. "One of the key approaches to this strategy is collaborating with a diverse range of partners, including global AI companies and telecommunication companies. Such collaborations have been pivotal in expanding SK Telecom’s global business and customer base."
By collaborating with partners, like SGH, SK Telecom hopes to “enhance AI factory and data center solutions. The aim is to solidify our position in the global AI value chain and create AI solutions that benefit customers, increase industry productivity and address social issues.”
SK Telecom’s growing AI investments
Over the last few months, SK Telecom has made several AI-related investments, such as at Anthropic, Lambda and Perplexity. With these investments, the service provider hopes to play a crucial role in across three key segments of AI ecosystem: semiconductors, infrastructure and services.
SK Telecom invested $100 million in Anthropic to jointly develop a large language model (LLM) customized for telcos. On the other hand, it invested in Lambda, a GPU cloud provider, to address the requirements of the global AI data center market. Earlier this year, it also announced an investment of $10 million in AI search engine Perplexity.
“Our investment in and cooperation with SGH will give us an opportunity to boost our position in the AI value chain,” said Ryu Young-sang, CEO of SK Telecom in the press release.
The company continues to explore partnership options with other AI companies.
“While we cannot provide detailed information or specific plans at this moment, we are actively pursuing collaborations with world-leading companies such as OpenAI, Anthropic, Perplexity, and many other telcos to bring an innovative AI experience to our customers,” said Ryu.
“Under our AI Pyramid strategy, we are open to exploring further collaborations to enhance our AI ecosystem. We are considering partnerships with various global AI companies, telecommunication companies and many more. The goal is to further develop and expand our AI services, innovate customer experiences, facilitate business growth, and drive AI innovation in areas such as AI data centers, AI chipsets,and multi-LLMs,” Ryu added.