Jung Seok-geun, head of SK Telecom’s CIC, has been appointed CEO of SK Hyper, SK Telecom’s AIDC specialist company. Photo=Created by ChatGPT
Find sites to build artificial intelligence (AI) data centers and secure large-scale power. Build substations and transmission and distribution networks, and attract global big tech firms as long-term customers. Raise the funds needed for data center construction by drawing in outside investors and financial companies.
This is the role that “SK Hyper,” recently established by SK Telecom, will take on. The plan is to create a specialized AI data center (AIDC) development company that ties together site, power, customers, and financing into a single business, going beyond simply constructing data center buildings and operating servers.
SK Telecom held a board meeting on the 23rd of this month and decided to establish SK Hyper, a company specializing in AIDC business development, and to invest a total of 750 billion won by 2030. SK Hyper will launch as a wholly owned subsidiary in which SK Telecom holds a 100% stake. Mirae Asset Securities forecast that SK Telecom will first inject about 330 billion won this month, then deploy the remaining amount in stages depending on how the business progresses.
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Only 750 Billion? A Priming Fund to Secure the Initial Business Base
SK Group plans to bring 5-gigawatt (GW) AIDCs into operation in stages starting in 2029 in Ulsan, the Chungcheong region, and the southwestern region, and to expand the total to 15GW by 2035 in line with market demand. Considering that the information technology (IT) capacity of the data centers currently held by SK Broadband is about 137 megawatts (MW), this is a target that far exceeds the scale of the existing business.
The amount SK Telecom has decided to invest in SK Hyper is 750 billion won. Shinhan Securities estimated the construction cost of a lease-type AIDC at about 18 trillion won per GW. Accordingly, the securities industry views the 750 billion won not as funding to directly build a 15GW-scale data center, but as priming money to secure the initial business base. Chung Won-seok, a researcher at Shinyoung Securities, said, “SK Hyper’s capital of 750 billion won is a very small portion compared to the total expected investment scale,” adding, “We expect the value of the initial stake to be recognized based on SK Telecom’s core roles, such as establishing the corporation, securing sites, building substations, and securing tenants.”
The securities industry forecasts that each time SK Hyper pursues an individual data center, it will establish a separate project company (SPC) and share the investment costs with financial investors (FI), strategic investors (SI), and financial companies. Rather than having SK Telecom bear the entire large-scale construction cost, the approach uses outside investment and project financing (PF) on a project-by-project basis. Kim A-ram, a researcher at Shinhan Securities, said, “SK Hyper will remain a 100% subsidiary of SK Telecom, and each time it pursues a data center project, it will establish a project company and contribute capital,” adding, “We expect it to share equipment investment costs with outside financial investors.”
From Telecom Carrier to AI Infrastructure Architect
The establishment of SK Hyper also means that SK Telecom is expanding the scope of its data center business from operation to development. Until now, SK Broadband has operated data centers centered on the colocation business, which provides companies with server space, power, and communication networks. The IT capacity of the data centers currently held by SK Broadband is about 137MW.
SK Hyper will focus on discovering and designing new GW-class AIDC projects rather than directly operating existing data centers. For projects currently underway, including the Ulsan AIDC, SK Broadband will continuously review expansion plans, while SK Hyper will divide the roles by securing sites, power, and customers for new projects to be pursued across the country in the future.
The securities industry is paying attention to the possibility that a structure will be created in which SK Broadband recognizes data center operating revenue, while SK Hyper and outside investors secure dividend income based on their stakes in the project companies. Researcher Kim A-ram explained, “We estimate that SK Broadband will recognize operating revenue, while SK Hyper and financial investors take the dividend income from the project companies.” Researcher Chung Won-seok said, “If earnings are recognized under the equity method, the performance of the AI infrastructure business may not be fully reflected in operating profit,” while also assessing, “It is positive that the company can recognize large-scale data center operating revenue while minimizing the fixed-cost burden from the enormous investment costs.”
Meritz Securities analyzed that if this kind of business structure takes shape, SK Telecom could transform from a traditional telecom operator into an “AI infrastructure architect.” It could break away from a business structure dependent on mobile subscribers and fee revenue, and secure AIDC development, operation, and investment returns as new growth engines.
SK Hyper Valued at 7 Trillion Won… SKT Annual Operating-Agency Revenue Could Reach 20 Trillion Won
The impact of AIDCs on SK Telecom’s earnings is expected to vary greatly depending on the business model. This is because investment costs and revenue scale differ significantly depending on whether it is a general AIDC that leases server space and power, or an “AI factory” that also provides computing resources such as GPUs.
Shinhan Securities estimated that if all 5GW is operated as lease-type AIDCs, annual operating-agency revenue could reach about 20 trillion won and the profit contribution about 1.8 trillion won. SK Telecom’s expected consolidated revenue and operating profit for this year are about 17.8 trillion won and 1.9 trillion won, respectively. However, Shinhan Securities explained that the construction pace of the 5GW and the proportion of AIDCs versus AI factories have not been determined, and that the lease operating profitability of 8% was an arbitrary assumption. Rather than an actual earnings forecast, it is a simulation showing the potential of each business model.
Shinyoung Securities estimated SK Hyper’s 2031 net profit at about 653.8 billion won and valued the company at 7.4 trillion won. This is the result of applying the assumptions that data center capacity reaches 3.3GW in 2031, of which 650MW is used for GPU services. It assumed a project stake ratio of 15% for the data center business and 5% for the GPU service business. Researcher Chung Won-seok explained, “Specific tenant acquisitions or lease contracts have not yet emerged, and the net profit SK Telecom can take may vary depending on the stake ratio and debt scale.”
The ‘Triangle Puzzle’ of Power, Customers, and Capital Is the Homework… SKT Valuation Re-rating Expected
There are also considerable risk factors that will determine the success or failure of the business. Meritz Securities cited the financial burden from large-scale capital expenditure, concerns over reduced dividends, and delays in AIDC-related permits and approvals as major risk factors.
To operate a 15GW-scale AIDC, the company must secure not only data center sites but also large-scale power, substations, and transmission and distribution networks. Regional permits and approvals, community acceptance, and the timing of grid connections could also affect the overall business schedule. If long-term customers are not secured as expected, there is also a possibility that the profitability of the power infrastructure invested in first will decline.
The impact of expanded AIDC investment on SK Telecom’s shareholder return policy is also a variable. Considering that SK Telecom is a telecom stock sensitive to dividend policy, Meritz Securities forecast that expanded AIDC investment could lead to partial adjustments to share buyback and cancellation plans rather than dividend cuts.
Accordingly, the market’s attention is expected to focus not on the launch of SK Hyper itself, but on long-term contracts with anchor tenants to be disclosed going forward, the scale of outside investment attracted, and the funding structure for each project. Meritz Securities analyzed that only when these three conditions take shape can a valuation re-rating of SK Telecom’s AIDC business begin in earnest.