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Korea’s AI Infrastructure Policy Shift: Implications for the Future of Data Centers

 

South Korea is accelerating its digital transformation under its national initiative, “AI: Top 3 Global Power.” In line with this vision, the government's strategic focus has expanded beyond semiconductors and batteries to include AI data centers (AI DCs)—with sweeping regulatory and financial support. This policy evolution signals a major inflection point for Korea’s digital infrastructure industry.

 

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[IMAGE : gettyimages]

 

1. SOC Designation and Corporate Tax Incentives

AI data centers are being incorporated into the government’s Social Overhead Capital (SOC) category, alongside traditional public infrastructure such as roads, railways, and schools. SOC designation will make AI DC projects eligible for corporate tax credits of up to 15–25% on capital investments.

However, formal criteria for AI DC classification—such as liquid immersion cooling systems and high-density power capacity per rack—are still under review, with detailed guidelines expected in the coming months.

 

2. Significant Budget Expansion

The government has increased its total AI infrastructure budget from KRW 10 trillion to KRW 16 trillion, marking a 58% increase. This includes:
- KRW 3 trillion for public-sector AI data center projects
- KRW 4 trillion for GPU procurement
- KRW 9 trillion for cybersecurity and related infrastructure
This budget surge, combined with the relaxation of metropolitan restrictions, is expanding participation opportunities, even for data centers that were previously excluded from public funding eligibility.

 

3. Reinforced AI Governance

To strengthen policy execution, a new presidential-level planning body, AI Future Strategy, has been launched to replace the former advisory-based AI Committee.
Notably, Ha Jung-woo, head of NAVER Cloud’s AI Center, has been appointed as the organization’s chief, reflecting a shift toward deeper technical leadership and operational focus.

 

4. Eased Regulations in the Seoul Capital Area

Historically, data center incentives were targeted at non-metropolitan areas. However, with the amended AI Promotion Act, regulatory and financial support is now available within the Seoul Capital Area, provided certain conditions are met.

Two primary eligibility paths:
1) Designation as an AI Innovation Zone
- Current zones: Seosan, Haenam, Jeju, Uiwang, Pohang, Ulsan, Busan
- Final designations expected in July; inclusion of Yongin remains unlikely

2) Energy Efficiency Compliance
- Facilities must adopt sustainable practices such as liquid immersion cooling, waste heat recovery, and compliance with PUE (Power Usage Effectiveness) standards

 

Press Releases

The National AI Committee unveils a comprehensive, whole-of-government strategy to enhance Korea's AI competitiveness

Strategies Key initiatives
Expand AI computing infrastructure    

1 Launch the Master Plan on National AI Computing Infrastructure
2 Facilitate private investment in AI computing infrastructure
3 Support the growth of domestic AI chip industry

Develop next-generation AI models 1 Support the development of innovative AI algorithms
2 Advance AI talent development systems
Accelerate AI adoption     1 Implement sector-specific flagship initiatives

 

AI Data Centers as Strategic Infrastructure

These policy developments reflect a broader paradigm shift: AI data centers are no longer viewed simply as IT facilities, but as strategic national infrastructure—critical to securing digital sovereignty, high-performance computing, and sustainable innovation.

As government support becomes more closely tied to environmental standards, scalability, and AI readiness, data center operators will be expected to meet more rigorous technical and regulatory expectations.
Long-term success will require not just capacity, but alignment with evolving policy frameworks and the ability to respond to geopolitical and technological dynamics.

Daou’s Strategic Response: Building Globally Aligned AI Infrastructure

In light of these shifts, Daou is advancing a proactive strategy to expand globally and lead the development of next-generation AI data centers. This includes designing facilities that integrate GPU-optimized systems, immersion cooling technology, and scalable high-density power infrastructure—all while ensuring compliance with both domestic regulations and international standards.

Our upcoming data centers are being engineered to support the next wave of AI-driven workloads. With sustainability, efficiency, and policy foresight built into our planning, Daou is positioning itself not only to meet regulatory requirements—but to help define the future of Korea’s AI infrastructure.

 

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Featured images via gettyimages.

 

 


 

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