National AI Computing Center Sees Zero Bids Twice in a Row... Project Terms Set for Overhaul

Private Sector Faces Heavy Liability and Uncertain Profitability
Relevant Ministries to Reassess Project Direction

The government's project to establish a National AI Computing Center has failed to attract bidders once again. With concerns over the structure of the project and liability conditions remaining unresolved, private sector companies are still hesitant to participate.

The Ministry of Science and ICT announced on June 13 that "no private consortiums applied during the re-announcement period from June 2 to 13, resulting in another failed bid." Previously, the initial call for bids in May also failed due to a lack of applicants. The ministry plans to soon re-discuss the direction of the project with related ministries, including the Ministry of Economy and Finance, the Financial Services Commission, and the Ministry of Trade, Industry and Energy.

The National AI Computing Center project aims to establish a special purpose company (SPC) with a 51 to 49 equity split between the government and the private sector, and to build a large-scale AI-dedicated data center outside the Seoul metropolitan area. The total project cost amounts to several trillion won. The center is targeting 1 exaflops (EF) of AI computing performance in the future, as well as an increased share of domestically produced AI semiconductors.

However, the lack of corporate participation in both rounds of bidding stems from distrust in the project structure among private companies. While the government’s investment is capped at 200 billion won, the private sector is required to cover the remaining investment. In addition, the 'put option' clause, which obligates the private sector to purchase the public sector's stake?including interest?upon SPC liquidation, remains a significant burden.

An industry insider commented, "This is a public sector-led project where profitability is difficult to expect, yet the private sector is required to provide joint guarantees or assume liability for damages. There is no merit in participating under such conditions," adding, "If the same conditions are maintained and the project is repeatedly re-announced, it will be difficult to attract any participating companies."

Within the AI industry, there are growing calls for the government to offer tangible incentives that can encourage private sector participation, such as revising the SPC equity structure and profit-sharing methods, in light of this failed bid. A Ministry of Science and ICT official explained, "We will review the entire structure from scratch, including whether the bidding requirements are truly burdensome."