Samsung Electronics, SK Hynix Shares Soar On OpenAI’s Korean Data Center Push

Shares of South Korean billionaire Jay Y. Lee’s Samsung Electronics and billionaire Chey Tae-won’s SK Hynix surged to record levels after the companies joined forces with OpenAI to help with the American AI titan’s Stargate data center project.

OpenAI, run by billionaire Sam Altman, unveiled Wednesday a raft of strategic partnerships with Samsung Group, SK Group and South Korea’s Ministry of Science and ICT to support the Stargate initiative, a $500 billion project to develop AI data center infrastructure for OpenAI. Since launching in January, Stargate has already onboarded the likes of billionaire Jensen Huang’s Nvidia, software giant Oracle and SoftBank-backed chip design company Arm.

SK Hynix’s stock price climbed almost 10% to close at an all-time high, while Samsung’s rose by about 3.5%, reaching a four-year peak.

The partnerships, in the form of letters of intent and memorandums of understanding, center on providing cutting-edge memory chips for Stargate operations and developing AI data centers in South Korea. They involve key group companies of Samsung and SK, including Samsung’s Samsung Electronics, Samsung SDS, Samsung C&T and Samsung Heavy Industries; and SK’s SK Hynix and SK Telecom.

“Korea has all the ingredients to be a global leader in AI—incredible tech talent, world-class infrastructure, strong government support, and a thriving AI ecosystem,” Altman said in a statement announcing the partnerships.

Samsung Electronics and SK Hynix are two of the world’s largest manufacturers of memory chips. These include high-bandwidth memory (HBM) chips that power AI data centers. SK Hynix is the main supplier of HBM chips to Nvidia. Both SK Hynix and Samsung supply HBM chips to Broadcom, which is making custom AI chips for OpenAI.

Together, they aim to help meet OpenAI’s memory demand, which is projected to reach up to 900,000 DRAM (dynamic random-access memory) wafers per month. That demand is “more than double the current HBM industry capacity, underscoring the immense semiconductor demand driven by the Stargate project,” SK Group said in a statement.

Kim Yong-beom, South Korea’s top presidential adviser, said OpenAI will order these wafers by 2029, according to local media.

SK Telecom plans to collaborate with OpenAI to build an AI data center in the southwest region of the country, as part of “Stargate Korea,” SK Group added in its statement. Separately, OpenAI may liaise with the Ministry of Science and ICT to evaluate opportunities for building AI data centers outside the Seoul Metropolitan Area.

Samsung C&T and Samsung Heavy Industries will “explore opportunities to pursue projects in floating power plants and control centers, in addition to floating data center infrastructure,” Samsung Group said in a statement. Floating data centers, which are housed on waterborne vessels or platforms, are a nascent field and not widely used. Compared to conventional data centers, they may offer lower cooling costs and address issues related to land scarcity, but could be more challenging to build and maintain.

Both Samsung and SK Group will explore implementing ChatGPT enterprise solutions, OpenAI said. OpenAI’s flagship chatbot is immensely popular in South Korea, which has the largest number of paying ChatGPT subscribers after the U.S., according to Jason Kwon, Chief Strategy Officer at OpenAI.

The latest collaborations come amid OpenAI’s rapid expansion in South Korea. In September, OpenAI opened its first office in the country and appointed former Google Korea country director Kim Kyoung-hoon to lead operations.

National AI and semiconductor manufacturing ambitions are a key focus for President Lee Jae Myung, who assumed office in June after months of political upheaval. Set to take effect next January, South Korea’s upcoming “basic law on artificial intelligence” includes the goal to become one of the world’s “top three nations in AI” by 2027.

Other South Korean companies joining the AI race include billionaire Kim Beom-su’s Kakao. The internet giant said earlier this month that it would invest approximately 600 billion won to build an AI data center, following a landmark partnership with OpenAI for a personalized AI tool and new products tailored to local users.

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