SK Telecom launches AI data center firm with $2.2B investment

SK Telecom will spin off SK Broadband's AI data center and submarine cable operations into a new company, SK Horizon, backed by a combined 3.08 trillion won ($2.23 billion) investment from KKR and a consortium of Korean investors.

"This governance restructuring is a proactive measure aimed at strengthening expertise and enabling faster execution in the AIDC business," Kim Seong-soo, CEO of SK Broadband, said. "As an AIDC infrastructure company, we will continue to scale up SK Horizon and grow it into Korea's leading data center operator."

The spin-off splits SK Broadband at a ratio of roughly 0.84 to 0.16 based on book value of net assets. SK Horizon will take over eight operating data centers across Seocho, Ilsan, Bundang, Gasan, Centum, Yangju and Pangyo, plus new AI data centers under construction in Ulsan and Guro — a combined 318 megawatts of capacity. KKR and the IMM Investment-Stonebridge consortium will hold 29 percent and 20 percent stakes respectively, with SK Telecom retaining 51 percent and management control.

The restructuring completes SK Telecom's three-tier AI infrastructure structure: SKT oversees strategy and global big-tech partnerships, SK Horizon operates and expands existing facilities, and SK Hyper — established in July — develops new gigawatt-scale projects targeting 5 GW by 2029 and 15 GW by 2035. Investment proceeds will fund expansion of data center capacity and submarine cable infrastructure essential for global AI workloads.

318 MW today, 5 GW by 2029

SK Horizon's 318 MW of operational and in-construction capacity positions it among the larger data center operators in Asia, though it remains far smaller than global leaders. Equinix operates more than 260 data centers worldwide, while Digital Realty manages roughly 300 facilities across 25-plus countries. The Korean market itself is growing rapidly — hyperscalers including Microsoft, Google and Amazon Web Services have all expanded cloud regions in Seoul over the past three years, driving demand for colocation and AI-optimized facilities.

The investment structure combines global and domestic capital. KKR, which manages over $100 billion in infrastructure assets and has deployed more than $70 billion across digital and power assets, is investing primarily from its Asia Pacific infrastructure strategy. The IMM Investment-Stonebridge consortium brings Korean institutional capital — IMM manages over $7.5 billion in assets, while Stonebridge has approximately $2.5 billion in cumulative AUM.

KKR and Korean capital back the buildout

The 3.08 trillion won injection gives SK Horizon the balance sheet to pursue aggressive expansion. SK Hyper's targets of 5 GW by 2029 and 15 GW by 2035 would make SK Group one of the largest AI data center developers in the Asia-Pacific region, competing with buildout plans from major Chinese and Japanese players.

The submarine cable component is strategically significant. As AI workloads increasingly require cross-border data transfer, control over undersea infrastructure becomes a competitive advantage. SK Horizon plans phased expansion of its submarine cable network, which connects Korea to major global internet hubs.

The deal reflects a broader trend of telecom operators pivoting toward AI infrastructure. SK Telecom joins companies like NTT, KDDI and Singtel in recognizing that traditional telecom revenue growth is slowing while AI infrastructure demand accelerates. The spin-off structure allows SKT to attract external capital at the subsidiary level without diluting its core telecom business.

For investors, the key question is whether SK Horizon can achieve the utilization rates that justify its expansion plans. Korea's data center market is competitive, with domestic players like LG Uplus and KT also expanding AI infrastructure alongside global hyperscalers building their own facilities. SK Telecom's existing relationships with major cloud providers and its 51 percent controlling stake give it strategic flexibility, but execution will determine whether the 318 MW today becomes the 5 GW platform SK Hyper envisions by 2029.

The spin-off is expected to complete in the first quarter of next year, pending shareholder approval at an extraordinary general meeting and government regulatory clearances.

This article is for informational purposes only and does not constitute investment advice.