[AIDC Era: Telecoms Join the Race] 'The Second Semiconductor'... Global Infrastructure War for AI Dominance

"AIDC = Factory for Producing Intelligence, Making It a National Industry"
Big Four’s Investments Soar... $1 Trillion Forecast Next Year
Korea in Focus with Robust Supply Chain, Infrastructure, and Strategic Location

"If past data centers were simply warehouses that stored data by gathering servers, today's AI Data Centers (AIDC) have become factories producing intelligence."

As countries around the world embark on an infrastructure race to secure dominance in the AI era, there is a growing consensus that the competitiveness of AIDCs will determine national competitiveness. Just as factories were fundamental to national strength during the Industrial Revolution, and communication networks were in the Internet era, it is expected that in the AI era, computational power will define industrial competitiveness—fueling an intense global rush to build AIDCs.

Big 4's Capital Investment to Reach $800 Billion–$1.1 Trillion

According to Bloomberg and other market research organizations on September 8, the combined capital expenditures (Capex) of the global Big Four tech giants—Microsoft, Meta, Google, and Amazon—are expected to soar. After amounting to around $200 billion (about KRW 269 trillion) in 2024 and about $330 billion last year, projections estimate a dramatic increase to approximately $610 billion this year. Next year, an astronomical investment of at least $800 billion—and up to $1.1 trillion—is anticipated.

The combined Capex of the Big Four companies has sharply risen since 2022, when generative AI began to take off. The rapid acceleration of the global generative AI market is leading directly to big tech investment, which is in turn structurally underpinning the growing demand for data centers. Notably, this surge is seen not as part of a cyclical investment but rather as a structural increase in spending, aimed at advancing generative AI services and expanding hyperscale infrastructure.

The proliferation of generative AI, such as ChatGPT, has triggered hyperscale demand for large language model training and inference. The AI workload is growing at a pace far faster than during the cloud transition, driving exponential growth in global electricity demand. The Big Four are also increasingly disclosing their mid-to-long-term infrastructure investment plans, addressing concerns about the sustainability of AI-driven demand.

Big Tech's Race to Secure Data Centers Intensifies Globally

Global real estate service provider CBRE noted in its report, "The competition among major Big Tech companies for securing data centers will remain fierce worldwide for the foreseeable future," adding, "Their tremendous capital investment and determination to secure infrastructure will, in line with global demand growth, become a key driver intensifying pressure for preemptive infrastructure expansion into the Asia-Pacific and Korean markets."

Experts agree that Korea, having secured global competitiveness through its semiconductor industry, now needs a blueprint to consolidate its AIDC competitiveness and nurture it as the next major industrial pillar. Korea possesses the world's top-tier semiconductor supply chain, energy and power infrastructure, advanced telecommunications networks, and a Northeast Asian geographical position that links China, Japan, and Southeast Asia—giving it the potential to grow as a hub for AI data center infrastructure and provide differentiated services.

They advise that, just as Korea achieved world-class industrial status with massive preemptive capital investments, industrial complexes, power grids, and a robust materials/components/equipment ecosystem, the same approach is required for AIDC to become the "second semiconductor" industry.

Cho Youngim, Professor of Computer Engineering at Gachon University, said, "If semiconductors turned Korea into the 'chip factory' of the world, AIDCs are a chance to make Korea the 'intelligence factory' of the world," and emphasized, "In a global context where astronomical sums are being poured into AI infrastructure, for Korea to take the lead and make AIDC a future industry, there must be a strong national commitment to expand AI infrastructure following semiconductors." Professor Cho also pointed out, "AI is both an upstream industry generating demand for semiconductors and a core driver of national digital competitiveness, but tax incentives for AI are lower than for semiconductors." She noted, "The tax deduction rate for national strategic technology commercialization facilities in AI remains at 15%, lower than the 20% for semiconductors, so there is insufficient incentive to attract trillion-won level infrastructure investment. Korea should consider applying the same deduction rate for AI as for semiconductors."

Suh Yongtae, PwC Korea Infrastructure & Energy Sector Leader, stated, "The higher the density of AIDCs, the more crucial it is to secure energy infrastructure for handling high power loads and ensuring stable electricity supply." He added, "It is urgent to develop structures that can achieve operational and automation efficiency through advancements in power and cooling technologies, and to reduce operating costs—thereby translating savings into additional income."

This content was produced with the assistance of AI translation services.