South Korea and US investment firm BlackRock have agreed to collaborate on establishing a “hyperscale” AI data center hub in Asia's fourth-largest economy, with plans to complete the project within a decade. The agreement was formalized through a memorandum of understanding signed on Monday between South Korean Science Minister Bae Kyung-hoon and Larry Fink, chairman of BlackRock and interim co-chair of the World Economic Forum.

The announcement emerged from a meeting between South Korean President Lee Jae Myung and Fink in New York on Monday. Also present at the meeting were Adebayo Ogunlesi, chair of BlackRock-owned Global Investment Partners, and Jim Yong Kim, former President of the World Bank.

Infrastructure and Regional Scope

The proposed infrastructure is designed to handle artificial intelligence applications that involve massive volumes of computing tasks. According to the memorandum of understanding, the data center hub will not only meet domestic South Korean demands but also accommodate demand across the Asia-Pacific region, which could experience explosive growth in the coming years.

Ha Jung-woo, Lee's senior presidential secretary for AI policy and future planning, explained that South Korea and BlackRock will “cooperate on plans to establish data centers for hyperscale AI applications powered by renewable energy.” The initiative aims to position South Korea as the leader in establishing an AI-related infrastructure hub in the Asia-Pacific region.

Investment and Technology Attraction

The new hub is expected to attract both capital and cutting-edge technology projects that require advanced infrastructure. Fink was quoted by Rep. Cha Ji-ho of the liberal Democratic Party as saying he would work to turn South Korea into the “AI capital of Asia,” and that the hub could open up investment opportunities for global capital. BlackRock, which Fink leads, is the world's largest asset management firm by assets, managing USD 12.5 trillion as of the second quarter of 2023.

A task force will be established between the South Korean government and BlackRock as a follow-up to the memorandum of understanding.

Political Context and Future Plans

During the meeting, President Lee emphasized South Korea's technological readiness, stating: “South Korea is science-savvy and its people are used to embracing new changes, so I think South Korea could be exemplary in its swift adoption of artificial intelligence and its rapid transition to renewable energy.” The announcement comes ahead of Lee's plan to chair an open debate of the 15-member United Nations Security Council about the use of AI, as South Korea assumes the rotating presidency of the council this month.

Ha did not provide details about the specific capacity the hyperscale AI data center could accommodate if built as planned, nor did he specify where the hub would be located within South Korea. Science Minister Bae and AI Senior Secretary Ha are scheduled to visit IBM's research facility in New York on Tuesday to explore how South Korea's quantum technology research capability could further develop, as the technology is expected to contribute to advances in AI technology.

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