Naver Makes Bold Move with Three-Way 'AI Factory' Alliance with Nvidia and Brookfield (Wrap-up)

$9 Billion AI Infrastructure Deal with Brookfield
Nvidia to Become Naver's Third-Largest Shareholder
"Three-Way Partnership Secures Stability and Competitiveness"

From left: Park Junwoo, CEO of Brookfield Korea; Bruce Flatt, Chair of Brookfield Corporation; Lee Haejin, Chairman of Naver; and Choi Suyeon, CEO of Naver, during a visit to Naver 1784 last September. Courtesy of Naver.

NAVER has signed an agreement with global asset manager Brookfield to secure computing infrastructure, fulfilling a key condition for Nvidia's strategic equity investment and accelerating its global AI factory business. As concerns mount in global markets over the weak performance and financial burdens of neocloud companies, NAVER plans to create a new growth opportunity in the AI infrastructure market through a three-way partnership with Nvidia and Brookfield.

NAVER announced on October 27 that it had signed a $9 billion agreement with Brookfield to secure computing infrastructure, fulfilling a key condition for Nvidia's strategic equity investment. The company said it plans to promptly complete the process for a third-party allotment of new shares to Nvidia. Once the process is complete, Nvidia will become NAVER's third-largest shareholder. This will also move the 1-gigawatt-scale global AI factory project jointly pursued by NAVER, Nvidia, and Brookfield into the implementation phase.

NAVER is seeking to set itself apart through a three-way business model that combines the respective strengths of the company, Nvidia, and Brookfield. NAVER will drive the AI factory business, drawing on its capabilities in building and operating large-scale in-house graphics processing unit (GPU) clusters and its data center operating expertise. Nvidia will provide technical collaboration on next-generation high-performance computing platforms such as "DSX," while Brookfield will provide financing for AI infrastructure investment.

NAVER aims to ease the burden of the enormous costs of building data centers and debt incurred to purchase GPUs, while focusing on securing a new growth engine in the AI infrastructure business. Brookfield, a global alternative asset manager with more than $1 trillion in assets under management worldwide, has extensive experience financing AI infrastructure investments, including establishing a semiconductor factory joint venture with Intel and collaborating with Microsoft (MS) on renewable energy development for AI infrastructure.

Concerns have recently emerged in the global AI infrastructure market about the sustainability of business models that rely on massive borrowing, along with controversy over "circular financing." CoreWeave, a leading global neocloud provider, faced growing financing pressures stemming from large-scale capital expenditures, sending its corporate bond yields soaring to as high as 15% at one point.

Unlike circular financing, which artificially rolls over debt to create a misleading impression, NAVER's partnership with Nvidia and Brookfield is designed to allocate capital and technology efficiently according to each party's role. The arrangement has been seen as reducing financial burdens by sharing direct capital expenditures through external capital and focusing on monetization through customer acquisition and operations. In addition, NAVER generates substantial operating cash flow (FCF) each year from businesses such as advertising and commerce, reducing the risks of entering the AI infrastructure business.

A NAVER representative said, "By combining the AI technology and data center operating capabilities we have built up over the years with Nvidia's advanced computing platform capabilities and Brookfield's global infrastructure investment capabilities, we can secure both stability and competitiveness for the business." The representative added, "We will create new growth opportunities in the global AI infrastructure market through a capital-efficient business structure."

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