- The move follows the rapid expansion of the infrastructure at Samsung SDS
- Samsung SDS appointed a new CEO in November
- The demands on AI data centers are increasing enormously
Samsung’s IT services division has announced plans to build an AI data center as the company looks to capitalize on the industry’s growing demand for AI computing.
Samsung SDS has purchased land and infrastructure at the Samsung Electronics factory site in Gumi, South Korea, for a consideration believed to be approximately $15 million.
According to the plans, the company will build the new location to complement its growing portfolio of data centers. The company currently operates 18 data centers worldwide, five of which are located in South Korea, including locations in Sangam, Gumi, Suwon, Dongtan and Chuncheon.
Samsung SDS’s move comes amid a period of high demand for AI computing capabilities worldwide, with companies ramping up adoption of the technology.
Western hyperscalers such as Microsoft, Amazon Web Services (AWS) and Google Cloud have all pledged to invest in infrastructure expansion.
Recent research from IDC predicts that increasing AI workload demands will lead to a sharp increase in data center capacity over the next three years, with the industry expected to record a compound annual growth rate (CAGR) of 40.5% by 2027.
Samsung SDS has invested heavily in data center operations in recent years to meet this growing demand. The company offers a range of infrastructure and managed cloud services.
In the third quarter of 2024, the company recorded a 35% increase in revenue from its cloud services segment alone, which represents a significant increase compared to the previous year.
The company 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 that the move would help expand its global user base.
The shake-up in management shows the focus on AI computing
Infrastructure investments are not the only focus for Samsung SDS at the moment. In November 2024, the company confirmed the appointment of Lee June-Hee as CEO.
June-Hee was previously executive vice president of Samsung Electronics’ networking operations and played a pivotal role in driving the 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 investments.