SK Telecom Negotiates for Ulsan AI Data Center

SK Telecom is discussing specific contract terms with 3–4 global operators for its gigawatt-scale artificial intelligence data center (AIDC) project in Ulsan. The company aims to secure customer demand for initial operating capacity by the first half of next year at the latest. After permitting and construction, it plans to begin phased operations in the second half of 2029. SK Telecom CFO Jong-seok Park gave the update during the company’s third-quarter 2026 earnings call on the 4th.

SK Telecom established SK Hyper to develop gigawatt-scale AIDC projects. Since its establishment in July, SK Hyper has been pursuing sites and customers, including at multiple potential locations outside Ulsan. The company has not disclosed contract amounts or schedules while negotiations with global operators continue. Park said SK Telecom’s principle is to secure initial customer demand before investing.

SK Telecom plans to obtain outside funding for the project. Park said long-term customer contracts demonstrate stable demand and provide a basis for external financing. Alongside contract negotiations, the company is considering strategic and financial investors and project financing (funding based on a project’s expected revenue). Interest rates affect borrowing costs, but Park said the project’s commercial viability matters more when attracting investment. SK Telecom believes stable, profitable long-term customer contracts can help attract the outside capital it needs despite uncertainty in market conditions such as interest rates.

Park also distinguished the roles of SK Horizon and SK Hyper. SK Telecom decided in August to establish SK Horizon, which will handle data center projects centered in the Seoul metropolitan area, a 100-megawatt Ulsan build, and expansion of its submarine cable business. Park said much of the existing business contracting and financing structure is already in place, making it appropriate for SK Telecom to retain a majority stake to ensure stability. SK Hyper, which is responsible for gigawatt-scale AIDC development, still needs to secure customer contracts and complete large-scale investment and financing processes, so SK Telecom chose a separate structure that can respond flexibly as the project takes shape. The company plans to use this setup to strengthen execution, manage financial burdens, and expand its AIDC business in stages.

SK Telecom is discussing specific contract terms with 3–4 global operators for its gigawatt-scale artificial intelligence data center (AIDC) project in Ulsan. The company aims to secure customer demand for initial operating capacity by the first half of next year at the latest. After permitting and construction, it plans to begin phased operations in the second half of 2029. SK Telecom CFO Jong-seok Park gave the update during the company’s third-quarter 2026 earnings call on the 4th.

SK Telecom established SK Hyper to develop gigawatt-scale AIDC projects. Since its establishment in July, SK Hyper has been pursuing sites and customers, including at multiple potential locations outside Ulsan. The company has not disclosed contract amounts or schedules while negotiations with global operators continue. Park said SK Telecom’s principle is to secure initial customer demand before investing.

SK Telecom plans to obtain outside funding for the project. Park said long-term customer contracts demonstrate stable demand and provide a basis for external financing. Alongside contract negotiations, the company is considering strategic and financial investors and project financing (funding based on a project’s expected revenue). Interest rates affect borrowing costs, but Park said the project’s commercial viability matters more when attracting investment. SK Telecom believes stable, profitable long-term customer contracts can help attract the outside capital it needs despite uncertainty in market conditions such as interest rates.

Park also distinguished the roles of SK Horizon and SK Hyper. SK Telecom decided in August to establish SK Horizon, which will handle data center projects centered in the Seoul metropolitan area, a 100-megawatt Ulsan build, and expansion of its submarine cable business. Park said much of the existing business contracting and financing structure is already in place, making it appropriate for SK Telecom to retain a majority stake to ensure stability. SK Hyper, which is responsible for gigawatt-scale AIDC development, still needs to secure customer contracts and complete large-scale investment and financing processes, so SK Telecom chose a separate structure that can respond flexibly as the project takes shape. The company plans to use this setup to strengthen execution, manage financial burdens, and expand its AIDC business in stages.