Daegu mayor presses SK over canceled AI data center plan
Mayor Choo Kyung-ho demanded that SK explain its withdrawal from an 800 billion won ($554 million) AI data center project, as concerns grow that Daegu is being left out of major regional investments.
Daegu Mayor Choo Kyung-ho delivers congratulatory remarks during a policy forum on attracting public institutions to Daegu at the National Assembly in Yeouido, western Seoul, on July 28.NEWS1
DAEGU — Daegu Mayor Choo Kyung-ho demanded that SK explain to the city's residents why it unilaterally withdrew from a planned AI data center project.
"Daegu residents are not only disappointed but outraged that SK has unilaterally betrayed the trust of the city and its people," Choo said in a statement on Wednesday.
"I urge SK to clearly explain to the people of Daegu its position on the unilateral withdrawal from the investment and, furthermore, what alternatives it intends to present. I will wait for a sincere response from SK.”
SK signed a memorandum of understanding in December 2023 with the Daegu Metropolitan City to build a high-performance, high-efficiency AI data center with a power capacity of 40 megawatts in Suseong Alpha City, a technology complex in Daegu.
The agreement was signed by a consortium comprising SK C&C, SK REIT and cloud solutions company Atto Research with Daegu. Under the plan, the consortium was to invest about 800 billion won ($554 million) to build an AI data center on a 9,917-square-meter (106,746 square feet) site with a total floor area of 29,700 square meters, with completion targeted for 2028.
However, while reviewing the project's progress earlier this year, the Daegu city government discovered that SK had withdrawn from the consortium. SK cited changes in the investment environment for data centers and shifts in its internal business conditions that had begun in the early half of last year.
Image of Suseong Alpha City, a technology complex in DaeguDAEGU METROPOLITAN CITY
It unilaterally notified the city in January that it was suspending the project, according to the city. At the time, Daegu was without a mayor after former Mayor Hong Joon-pyo resigned to run for president.
Since the launch of the ninth municipal government administration, Daegu has also been left out of a series of large-scale investment plans announced by the government and major corporations.
Earlier this month, as part of the government's three “mega projects” initiative, SK Telecom announced plans to invest 140 trillion won to develop the Yeongnam region into Asia's largest AI data center infrastructure hub. Yeongnam refers to the Gyeongsang province region.
However, it selected Ulsan as the first project site and made no mention of Daegu, despite its plan to establish a two-gigawatt AI data center cluster in the region.
Concerns that Daegu is being sidelined have also grown after major semiconductor manufacturing projects led by SK hynix and Samsung Electronics were directed to the country's southwestern region instead.
Mayor Choo met with the chief executive of SK REIT last Thursday to hear an explanation of the circumstances behind the suspension of the AI data center project. During the meeting, he voiced strong dissatisfaction over SK's unilateral decision to halt the project.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
