"Supporting Industry with Specialized Data Centers Amid AI Semiconductor Shortage"

Interview with Kim Dong-hoon, CEO of NHN Cloud
"Demand for AI-specialized data centers will increase"

Kim Dong-hoon, CEO of NHN Cloud, is meeting with reporters at the headquarters in Bundang-gu, Seongnam-si, discussing the future of artificial intelligence (AI) and the cloud industry. Photo by Heo Young-han younghan@

"NVIDIA holds an absolute position, and although competition may not be easy in the short term, the emergence of a competitive landscape is meaningful."

Dependency on NVIDIA is a concern for companies related to artificial intelligence (AI). Although the AI era has officially begun, there is a shortage of NVIDIA's graphics processing unit (GPU) H100, which is considered optimized for development. In this situation, the formation of an anti-NVIDIA front has received positive evaluations. NHN Cloud, which operates AI-specialized data centers and supports industry growth, shares the same view.

Kim Dong-hoon, CEO of NHN Cloud, recently told Asia Economy, "From the perspective of cloud companies, GPUs are purchased and provided as a service, and even Microsoft (MS) and Google are gradually increasing the proportion of replacing NVIDIA products with new ones."

While the H100 is currently experiencing supply shortages, its price remains high. This is due to intense competition in AI-related service development, leading to high demand. In response, big tech companies such as Google, Meta, Apple, and MS have started developing their own AI chips, and Intel has unveiled its AI processor ‘Gaudi3’. Samsung Electronics is also reportedly developing AI inference chips called the 'Maha series (Maha1 and Maha2)'.

Amid difficulties in purchasing equipment for AI service development, NHN Cloud supports companies by operating AI-specialized data centers. NHN Cloud was selected as the cloud infrastructure construction and operation business operator for the 'AI-Centered Industrial Convergence Complex Project' promoted by the Ministry of Science and ICT and Gwangju Metropolitan City in 2021, leading the establishment of the national AI data center and conducting a pilot operation for over two years. Since its official launch in October last year, 470 companies, including Upstage, have been utilizing the national AI data center.

The strength of the national AI data center lies in its computing power. It boasts a total computing capacity of 88.5 petaflops (PF) and a storage capacity of 107 petabytes (PB). The 88.5 PF means it can perform the equivalent computations of about 500,000 general-purpose laptops per second. NHN Cloud owns more than 1,000 H100 units. Kim Dong-hoon, CEO of NHN Cloud, said, "NVIDIA products themselves require high power and need to increase integration density," adding, "The demand to use AI-specialized data centers will inevitably increase in line with the demand for AI service development."

Kim also predicted that cloud transition will accelerate alongside the growing demand for data centers driven by AI advancement. He said, "Cloud is preferred because it can reduce costs such as server construction and offers a better development environment. While some companies may find server operation more effective without using the cloud, overall, the trend toward cloud transition is expected to continue."

As cloud transition accelerates in the public sector, including the government, NHN Cloud is playing a pivotal role. It was the first to implement the Onnara 2.0 system as a cloud-based administrative network. Additionally, it is conducting the transition project for Shinhan Investment Corp. in the financial sector.

Leveraging its strengths, NHN Cloud plans to expand globally, including into Japan, after securing the top domestic market share. CEO Kim Dong-hoon said, "The ranking of market share keeps changing depending on orders, but becoming the overwhelming number one is a short-term goal." He added, "In Japan, companies are considering cloud transition, and related policies are emerging, so growth is expected to be significant. The Japanese market itself is larger than the domestic market, and global business experience is expected to help future expansion into Southeast Asia and other regions."