Call for Proposals Open Until October, SPC to Be Established in First Half of Next Year
Investment Risks Eased by Removing Put Option and Abolishing Mandatory Domestic NPU Adoption
The government has launched a new call for proposals for the construction of the National AI Computing Center, a project designed to significantly reduce the burden on private sector participants. The government has revised the public-private equity structure and excessive liability conditions, which were the main reasons for the previous two failed bidding attempts due to lack of private sector interest. The plan is to accelerate the establishment of an artificial intelligence (AI) infrastructure “superhighway” equipped with 15,000 advanced graphics processing units (GPUs).
On September 8, the Ministry of Science and ICT announced a new call for private sector participants in the National AI Computing Center project. Applications will be accepted until October 21, with the goal of establishing a special purpose company (SPC) in the first half of next year. The two previous calls earlier this year were unsuccessful due to a lack of participating companies.
Government Stake Below 30%... Minimizing Private Sector Burden
The most significant change in this call is the reduction of the government’s stake in the SPC to below 30%. Previously, the structure was 51% government and 49% private sector, but it has now been adjusted to “less than 30% public, more than 70% private,” ensuring private sector-led management. This also eliminates the possibility of the center being designated as a public institution.
Additionally, the government has removed the put option that allowed public participants to demand public investment funds and guaranteed returns from private participants. Instead, Korea Development Bank and Industrial Bank of Korea will participate as preferred shareholders, minimizing the risk of principal loss. Despite the project’s low profitability and public interest focus, the structure has shifted from one in which the private sector bore all the burden to a private profit-oriented operating model.
Mandatory Domestic AI Semiconductors Abolished... Securing 15,000 GPUs
The requirement to adopt 50% domestic AI semiconductors (NPUs) by 2030 has also been abolished. Instead, the private sector is now free to propose optimal plans for promoting domestic AI semiconductors. Separately, the government will invest 252.8 billion won this year to commercialize domestic AI semiconductors. In addition, the plan is to secure more than 15,000 advanced GPUs by 2028 and more than 50,000 by 2030.
To fund the project, the government will invest more than 2 trillion won through public-private equity and policy finance loans. The government will contribute 80 billion won by 2030, while Korea Development Bank and Industrial Bank of Korea will match the scale of private sector investment. The final investment amount will be proposed by the private sector, and up to 2.5 trillion won in policy finance support is available through Korea Development Bank’s special program for semiconductor facility investment.
The center will be established outside the Seoul metropolitan area to promote balanced regional development, and projects utilizing carbon-free energy sources such as renewable energy will receive preferential evaluation. Additional points will be given for launching services before 2027.
Expanding Private Sector Autonomy, Government to Support Demand Creation
The private sector will have full autonomy in determining service types and pricing structures. However, support measures for small and medium-sized enterprises, startups, universities, and research institutes will be considered in the evaluation. The government will prioritize the use of the National AI Computing Center in related fiscal projects such as AI research and development, public and private digital transformation (AX), and “AI for All” to secure initial demand.
To incentivize investment, the integrated investment tax credit rate will be increased from the previous 1%-10% to 15%-25%. AI service data centers have also been added to the list of national strategic technology commercialization facilities, further enhancing tax benefits.
The government will simultaneously promote performance enhancement, public sector demand creation, and the establishment of large-scale testbeds to vitalize domestic AI semiconductors. In the future, the government also plans to support the adoption of domestically produced NPUs with proven performance in the National AI Computing Center.
Minister of Science and ICT Bae Kyunghoon stated, “We will quickly secure 50,000 advanced GPUs and use them as a catalyst to vitalize the AI ecosystem,” adding, “The National AI Computing Center will serve as a key hub supporting Korea’s leap to become one of the world’s top three AI powers.”
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