Amazon's AWS to fuel South Korea's AI hub with new $5 billion investment

Amazon Web Services (AWS) is set to channel another $5 billion into South Korea to expand its data center infrastructure, a major investment aimed at bolstering the nation's ambition to become a dominant force in the global artificial intelligence race.

The commitment, announced by South Korea’s presidential office, deepens the ties between major US technology firms and the Korean market, which is rapidly emerging as a critical hub for AI development and hardware.

Investment to fuel a national AI ambition

According to the presidential office, the investment from Amazon is part of a larger $9 billion pledge made by executives from seven global firms over the next five years.

During a meeting with AWS CEO Matt Garman, South Korean President Lee Jae Myung said the new funding would be a crucial catalyst for the country’s strategic goals.

Amazon's investment will accelerate the growth of an ecosystem for the AI industry in South Korea, as the country aims to become one of the world's top three AI leaders, Lee said at the meeting with Garman.

The new AWS data centers are planned for construction on the outskirts of Seoul, adding significant capacity to the region.

While a significant sum for South Korea, the investment is also a component of AWS's much larger capital allocation across the Asia-Pacific region.

At a business event, CEO Matt Garman detailed the company's expansive strategy. "At AWS, we've invested and committed to investment of an additional $40 billion across 14 non-US APEC countries and economies between now and 2028," Garman said.

He also noted the significant economic ripple effects of such spending. "And, that $40 billion actually drives an additional $45 billion in US GDP and downstream benefit, benefiting all of the APEC economy," he said.

This new commitment follows a separate $4 billion investment plan AWS unveiled in June as part of a project with SK Group to build a massive data center in Ulsan.

Big tech deepens its roots in South Korea

Amazon's move is part of a broader trend of major US tech players increasing their footprint in South Korea.

Earlier this month, the presidential office announced that OpenAI planned to build two data centers in partnership with local giants Samsung and SK, in a project dubbed a Korean-style "Stargate."

Underscoring the country's importance, OpenAI said that South Korea represents its second-largest market of paying ChatGPT subscribers, surpassed only by the United States.

Furthermore, OpenAI has signed initial agreements to source critical memory chips for its data centers directly from Samsung Electronics and SK Hynix, cementing the symbiotic relationship between American AI developers and Korean hardware manufacturers.