There is a peculiar sense of being left behind in the South Korean artificial intelligence (AI) industry. Since the emergence of OpenAI’s ChatGPT in November 2023, AI competition has turned into a battle of astronomical capital, yet South Korea has not shown a strong “one-two punch” like China’s DeepSeek “RI” or Monica’s “Mannus AI.” The presence of elite bureaucrats, who once meticulously designed industrial policies, is not the same as before.
The audacious plan came from Silicon Valley. Silicon Valley investment firm FirHills plans to build an AI data center with more than 3 gigawatts (GW) of capacity on a 1.2 million pyeong site in Haenam, South Jeolla Province. It has been compared to the “Asian version Stargate,” referencing the AI infrastructure project led by U.S. OpenAI, Oracle, and Japan’s SoftBank Group.
FirHills and its parent company Stock Farm Road (SFR) are venture investment firms founded by Koo Bon-woong, the third-generation member of the Pan-LG family, and Amin Badr-El-Din, who established Badr Investments based in London and Jordan.
In early March, I met Koo Bon-woong, co-chair of SFR, in Seoul to hear about the AI data center project plans. During the interview, Koo said, “South Korea lagged behind in the mobile era but achieved a turnaround with Samsung Electronics' Galaxy smartphones. However, one should not expect to catch up in the AI era in the same way.”
He emphasized, “If it is difficult for South Korea to lead the LLM (large language model) competition, it should seize the opportunity of the AI era by reinventing itself as a testbed for ultra-large data centers.”
On Feb. 26 (local time), South Jeolla Province signed a memorandum of agreement (MOA) at the Hyatt Hotel in Santa Clara, USA, with investment firm FirHills, SuNam Corporate City Development, and Haenam County to build the ‘Solrasido AI Supercluster Hub.’
The following is a Q&A with Co-Chair Koo.
Building a 3GW data center is an enormous project. 3GW is equivalent to the amount of power that can be used by about 2.25 million to 3 million households. Each data center in the US “Stargate Project” is also known to be 1GW (totaling 5GW).
The scale of the AI supercluster currently underway reflects not only the demand of South Korean corporations but also the needs of global big tech aiming to enter the Asian market. It also considers future demands for AGI (Artificial General Intelligence) learning and inference.
The AI supercluster will serve as AI hub for Asia, operating in a manner that connects with each country’s small-scale AI inference infrastructure. This is similar to the way global large cloud corporations distribute and build region and edge infrastructures in various countries to provide services.
In this regard, discussions are underway about constructing AI inference infrastructure with major corporations in the Philippines. Similar cooperation is being pursued in Malaysia. FirHills aims to build an AI network across Asia through this expansion strategy.
― Will global big tech corporations move into or invest in the AI data center located in South Korea?
“I met several involved in the data center construction in the United States. In South Korea, when it is said there is ‘power,’ it means Korea Electric Power Corporation can supply more than 95%. But in the U.S., it’s at the level of ‘intention.’ Building a data center in the U.S. takes more than eight years for site preparation and construction.
The critical factor in the AI war is ‘speed.’ Securing AI infrastructure one to two years faster is absolutely crucial for global big tech corporations. We plan to create an ultra-large AI data center within three years and are persuading investors that South Korea is the strategic location for it. If South Korea becomes the ‘testbed’ for the AI data center project guidelines, collaboration with the U.S. is also possible.
Regarding this, Kim Young-rok, the governor of South Jeolla Province, stated, “We will actively attract investments from global big tech companies like Alphabet (Google’s parent company) and Microsoft (MS) to contribute to South Korea’s leap in the global AI market in the era of AI transformation.”
Governor Kim also proposed the AI energy special zone with the mega sandbox concept by meeting consecutively with the Ministry of Trade, Industry and Energy and political arena, requesting a much broader deregulation than existing regulatory reforms for building the Solrasido AI Supercluster Hub.
― It is not to undermine South Jeolla Province’s efforts, but there may be limits and challenges for a South Korean local government to spearhead such a massive project. In fact, President Donald Trump is personally overseeing the ‘Stargate’ project, and President Emmanuel Macron of France is also working to attract the investments needed for building AI and data center infrastructure in their own country (€109 billion).
“AI data centers are complexes encompassing technology and personnel for power, communications, water, and computing. The policy leadership of a nation is also a crucial factor.
For example, the power rate for data centers in South Korea follows the residential power rate system. It must create a data center-specific rate plan or reduce rates through bilateral long-term contracts between power companies and businesses, similar to industrial electricity, to gain international competitiveness.
Recently, SoftBank declared it would make Japan a leader in AI infrastructure, emphasizing that AI infrastructure is the key to national competitiveness.
― How do you plan to raise the substantial funds needed to build and operate a data center?
“FirHills currently expects an initial investment of $10 billion (approximately 15 trillion won), with the potential to expand up to $35 billion (approximately 50 trillion won) throughout Korea. The demand for AI data centers is exploding, so it is believed that raising funds will not be difficult.
We are proceeding with attracting investments by utilizing Silicon Valley and global networks and negotiating with multiple investors. In particular, we are exploring ways to maximize joint investments and technological synergies by cooperating with global tech corporations.
South Jeolla Province’s administrative and financial support also plays an essential role. FirHills Korea is expected to be established soon to contract with South Jeolla Province.
South Korea was a leading country in the internet era and a strong player in the smartphone market during the mobile era, but it has struggled to find a breakthrough in the AI era.
If it is not easy for South Korea to take the lead in the LLM field, I think it should reinvent itself as a testbed base for super-large AI infrastructure. By combining South Korea’s strengths with this AI infrastructure, excellent AI applications in fields such as Industrial AI, Creative AI, and Commerce AI will emerge."
― You have been doing business in the U.S. for over 20 years. Could you offer advice on strategies for American-style negotiation, specifically Trump-style negotiation?
“Trump-style negotiation features strong pressure and proactive assertions. Trump frequently throws out strong demands from the outset and uses a strategy of unsettling negotiation partners. I’ve encountered similar situations in Silicon Valley business negotiations.
You cannot gain substantial benefits by being psychologically led or flattering the other party. Simple rebuttals won’t work either. Neither a deferential nor defensive attitude will be effective. Instead, you have to strongly appeal to why your business is attractive and why South Korea is significant. Although the Japanese Prime Minister self-evaluated having a successful summit with Trump, didn’t Japan ultimately fail to avoid tariffs on its steel products?"
― You were born into a South Korean chaebol family and are evaluated as a ‘bold maverick’ who broke out of that mold.
“Initially, I planned to spend only four years at university in Silicon Valley before returning home. I did not foresee staying here for more than 20 years. Now, I consider it destiny. I believe there is a ‘mission’ given to me.
When I first ventured into startup investment in Silicon Valley, I focused solely on ‘business’ and ‘innovative ideas.’ Now, I realize the importance of considering systems and networks, and most importantly, working with good people.
That’s why this project is done together with Amin Badr-El-Din, co-chair of SFR, who led economic diversification and financial infrastructure building in the United Arab Emirates (UAE). Amin is capable of leading collaborative projects between Middle Eastern and other countries."
― Why don’t ‘big ideas’ like those from Silicon Valley emerge in South Korea?
“Perhaps South Korea lacks a ‘playground’ where its outstanding talents can freely express their intentions. A culture that predicts and evaluates results before even attempting challenges hinders new and large concepts.
Innovation is a game that requires a ‘home run.’ Unless aiming for ‘single hits,’ you need to make a ‘Big Swing.’ Failure may be an inevitable process because ‘Big Swings’ become more robust through failure.
The strength of Silicon Valley lies in its culture that acknowledges failure as part of the growth process and values that experience highly. Thanks to that, I was able to bring in individuals like John Hennessy, former Stanford president (now Alphabet chairman), as an advisor to SFR, and economic policy experts like Neelie Kroes, who served as European Union commissioner and competition commissioner, to join SFR as an advisor.
They do not merely lend their names but provide insights into management strategy and play a role in connecting with key global figures. At SFR, they are referred to as the ‘brain trust.’"
No one can deny the importance of data centers in the AI era. Ultra-large data centers are ‘ultra-large AI’ itself. However, successfully building them is another matter entirely.
Can the bold planning that started in Silicon Valley awaken the unique ‘wild instinct’ of South Korea? South Korea is a country with titles like the world’s first 64-mega DRAM development, the seventh in localizing TDX (all-electronic exchange), and the world’s first CDMA commercialization.
Glossary
Stargate
A joint venture project led by U.S. OpenAI, Japan’s SoftBank Group, and U.S. Oracle. It plans to invest up to $500 billion (about 700 trillion won) over the next four years to build AI infrastructure, including data centers in the United States. It gained attention when U.S. President Donald Trump personally announced this project. Bloomberg reported that OpenAI and Oracle are building the first Stargate data center in Abilene, Texas, and plan to equip it with 64,000 of Nvidia’s latest AI chip, GB200, by 2026.