Contract structure for Naver’s large-scale artificial intelligence (AI) factory project. Photo courtesy of Naver disclosure
Naver has disclosed the contract structure for its large-scale artificial intelligence (AI) factory project pursued through collaboration with Nvidia and Brookfield Asset Management. The core of the plan is to minimize financial risk from building massive infrastructure by using a special purpose vehicle (SPV).
Naver disclosed on the 3rd the business structure for the first phase, a 200-megawatt (MW) project, of its total 10 billion dollar AI factory construction initiative.
According to the disclosed business structure, Nvidia will make a 1 billion dollar equity investment in Naver as a strategic partner. Naver will secure a 100% stake in the AI factory operating company to be established in the future, overseeing the entire AI computing business.
Global asset manager Brookfield will contribute 9 billion dollars to establish the SPV. This SPV will directly purchase and own the graphics processing units (GPUs) and data center facilities required to operate the AI factory. Naver’s AI factory operating company will lease computing resources from the SPV, pay fees based on usage, and then provide full-stack computing services to end-customer companies to generate revenue. Naver is also reviewing a plan to acquire a minority stake in the SPV to ensure stable resource procurement.
This structure is a strategic choice to reduce the financial burden of large-scale initial capital investment. By adopting the SPV approach instead of purchasing all infrastructure directly with its own funds, Naver is expected to significantly lower the risk of increased borrowing and deteriorating financial soundness associated with large-scale investment.
Naver has currently selected Brookfield as its exclusive preferred negotiating partner for 12 weeks and is conducting detailed negotiations. It is also in discussions with several companies for supply contracts based on the AI factory, and the first customer is expected to take shape in the second half of this year.