- The move follows rapid infrastructure expansion at Samsung SDS
- Samsung SDS appointed a new CEO in November
- AI data center demands are skyrocketing
Samsung’s IT services division has announced plans to build an AI data center as the firm looks to capitalize on growing industry demand for AI compute.
Samsung SDS has purchased land and infrastructure at the site of Samsung Electronics plant in Gumi, South Korea, for a fee believed to be around $15 million.
Under the plans, the company will build the new site to complement its growing portfolio of data centers. The firm currently operates 18 data centers globally, five of which are located in South Korea, including sites at Sangam, Gumi, Suwon, Dongtan, and Chuncheon.
The move by Samsung SDS comes amid a period of intense demand for AI compute capabilities globally, with enterprises ramping up adoption of the technology.
Western hyperscalers such as Microsoft, Amazon Web Services (AWS), and Google Cloud have all made pledges to invest in infrastructure expansion.
Recent research from IDC predicts surging AI workload requirements will prompt a sharp increase in data center capacity over the next three years, with the industry projected to record a compound annual growth rate (CAGR) of 40.5% by 2027.
Samsung SDS has been investing heavily in data center operations in recent years to meet this growing demand. The firm provides a range of infrastructure and managed cloud services.
In the third quarter of 2024, the company recorded a 35% surge in revenue from its cloud services segment alone, marking a significant increase on the year prior.
The firm also recently unveiled plans to launch its FabriX AI service as part of a deal with Microsoft Azure, noting in a statement at the time the move would help expand its global user base.
Management shake-up showcases AI compute focus
Infrastructure investment isn’t the only focus for Samsung SDS at present. In November 2024, the company confirmed the appointment of Lee June-Hee as chief executive.
June-Hee previously served as executive VP of Samsung Electronics’ networking business, and played a crucial role in driving adoption of 5G networks for Samsung’s Galaxy series smartphones.
In his new role, June-Hee will lead the company’s current AI strategy, with a specific focus on ramping up infrastructure investment.