Amazon (AMZN) Bets Big: $5B AI Power Play in South Korea Signals Tech Arms Race

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2025-06-20 20:28:13

Amazon just dropped a $5 billion grenade in Asia's AI battlefield—and Seoul is ground zero.

The e-commerce giant's audacious investment targets South Korea's booming tech ecosystem, aiming to outflank rivals in the region's cutthroat AI development race. No vague promises here—that figure buys serious data center muscle and talent acquisition firepower.

Wall Street analysts are already salivating over the revenue potential, though cynics note this conveniently distracts from Amazon's recent cloud division slowdown. One thing's certain: when tech titans start throwing around billions, the real winners are usually shareholders—not necessarily innovation.

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AI Driver

According to the country’s Science Ministry, the deal involves a $4 billion spend from Amazon Web Services, Amazon’s cloud services provider.

The AI data center in the southern city of Ulsan is expected to begin construction in September and be fully operational with a capacity of 100 megawatts by 2029.

It will also house four times as many GPUs as South Korea’s National AI Computing Center, which aims to deploy 15,000 GPUs by 2027.

SK Group Chairman Chey Tae-won said he planned to expand the data center’s capacity to one gigawatt in the future and make it a global hub that handles domestic AI demand. He added that artificial intelligence was crucial for South Korea’s growth.

Asian Expansion

According to Invest Korea, the size of the Korean AI market is estimated to grow by 12.1% this year to reach $2.25 billion. The market is expected to grow at an annual average growth rate of 14.3% to 2027, driven by its use in major industries such as information and communication, manufacturing, medical, public/defense, finance, and education.

AWS has a cloud region in South Korea, located in Seoul, with four availability zones that launched in 2016. The company is also building a data center in Seo-gu, Incheon as it ramps up its expansion in Asia and Oceania.

It recently announced that it is planning to invest A$20 billion, or US$13 billion, in Australia from 2025 to 2029 in order to improve the AI infrastructure in the country. It is the largest technology investment in Australia’s history.