Samsung gears up to build its first AI data center
What's the story
Samsung SDS, the IT services arm of Samsung, is gearing up to set up its first AI-dedicated data center in Gumi, South Korea.
The company has purchased land and infrastructure for the project at an estimated cost of $15 million.
The new facility will join Samsung SDS's existing network of 18 global data centers, including five currently operating in South Korea.
Market response
Strategic move amid surging AI demand
Samsung's move to bolster its AI infrastructure comes as a strategic response to the industry's growing demand for advanced AI capabilities.
It comes in line with a recent IDC study that predicted a massive increase in AI workloads, with data center capacities growing at a compound annual growth rate of 40.5% by 2027.
Major tech giants like Microsoft, Google Cloud, and Amazon Web Services (AWS) have already committed to expanding their infrastructures accordingly.
Financial performance
Samsung's cloud services division records 35% revenue jump
Samsung's cloud services division has performed well, reporting a 35% increase in revenue in Q3 2024, year-on-year (YoY).
The company's partnership with Microsoft Azure to launch the FabriX AI service also highlights its focus on expanding its footprint in the AI space.
To push these AI-driven ambitions, Samsung SDS recently appointed Lee June-Hee as its new CEO, a veteran credited with driving innovations in Samsung Electronics's networking business.