Korean system integration (SI) companies are collectively pushing to expand revenue this year through data center design, build, and operate (DBO) projects. Demand for data centers to run artificial intelligence (AI) models is surging as the AI market shifts from training to inference. With companies lacking data center experience also entering the market, opportunities are opening up for firms with DBO expertise.
According to industry sources on the 4th, domestic SI companies are focusing on preparing for data center DBO project bids scheduled for the second half of this year. "Asset management firms have recently been actively pursuing data center development, particularly in provincial areas," an industry official said. "We are preparing on the expectation that related bid announcements will proceed in earnest in the second half."
Companies have been accumulating references by winning data center construction contracts since late last year. Samsung SDS, which designated data center DBO as a new business last year, is a prime example. Samsung SDS is currently conducting a proof of concept (PoC) for a data center being developed by a major domestic asset management firm. Once the main contract is signed following the PoC, details such as the data center's scale and contract value are expected to be disclosed.
Lotte Innovate has also identified expanding DBO project wins as a measure to boost its corporate value this year. In February, the company won a DBO contract for an urban edge data center from IGIS Asset Management. The facility spans one basement floor and nine above-ground floors, with a power capacity of 9.9 megawatts (MW). Earlier, at the end of last year, the company signed a data center operation consignment contract with Camsquare Yongin Data Center PFV.
LG CNS, a traditional powerhouse in the data center DBO market, plans to actively pursue additional contracts based on its track record at the Samsong Data Center. The company's DBO-related contracts at the Samsong Data Center, including those with Naver Cloud, exceed 1 trillion won based on phase two alone (the first expansion of power capacity after securing initial demand). This is the largest contract scale since the company's founding. A data center project won in Indonesia is also scheduled for completion by the end of this year. In addition, KT Cloud won the DBO contract for the Guro Data Center being developed by Capstone Asset Management last year. LG Uplus recently added data center DBO to its corporate charter's business purposes, declaring its entry into the market.
The industry's aggressive push into data center DBO projects stems from the rapid growth of the data center market. According to market research and consulting firm Grand View Research, the global data center market is projected to reach $60.5 billion by 2030, representing a more than 200% increase from last year. As AI evolves from training large models to repeatedly performing real-time inference across various service environments, the need for data centers to power these operations has surged. "With rising demand for AI cloud, supply falls short of market demand for data centers," said Kim Tae-hoon, head of LG CNS's AI Cloud Business Division and executive vice president. "As graphics processing unit (GPU) performance evolves rapidly on roughly six-month cycles, the ability to quickly build ultra-large data centers of 200 MW or more is emerging as a key competitive factor."
It is against this backdrop that asset management firms without experience in data center construction and operation are entering the market as part of their investment portfolios. "They have no choice but to work with companies that have experience in data center design, construction, and operation," an AI industry official said. "Competition among SI companies for these contracts will intensify."
