South Korea Forms Public-Private Alliance for AI Data Centers and SKT Unveils AI Model A.X K2

South Korea's Ministry of Science and ICT has formed a public-private alliance to build 18.4GW of AI data center capacity by 2035, unveiled alongside SK Telecom's A.X K2, a 688-billion-parameter successor to its 519-billion-parameter A.X K1,,.

The buildout runs in two phases: 8.4GW by around 2029 for roughly 550 trillion won, split between SK Group (5GW), GS Group (2.4GW) and Naver (1GW), then another 10GW through 2035, pushing cumulative investment past 1,000 trillion won. It sits inside Seoul's wider 'Three Mega Projects' push, which also funds domestic AI chips and physical AI robotics.

A.X K2 improved average benchmark performance 32.2 percentage points across 14 tests over its predecessor,. SK Telecom is piloting it in manufacturing at KG Steel's Dangjin plant and at KONEC, building on quantized A.X-family models already used with Korea's Ministry of National Defense, and with SK Biopharmaceuticals, where AI-assisted work cut early cancer therapy research from one to two years down to about five months.

For US investors, the buildout points toward the memory and GPU chain behind it: SK Hynix and Samsung Electronics, Korea-listed only, supply the HBM memory hyperscale clusters need, while NVDA remains the dominant GPU vendor Korean operators build around. SK Telecom trades in the US as the SKM ADR.

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