Naver, Brookfield Seek $9 Billion for Sejong AI Data Centre Expansion
Korean financial institutions are considering participation in the financing for the 200-megawatt facility, which will house 100,000 Nvidia GPUs.
Naver Seeks $9 Billion for AI Data Centre
Naver and Brookfield are negotiating up to $9 billion in financing for a significant expansion of Naver's Gak Sejong AI data centre in South Korea. The overall project, valued at $10 billion, aims to boost the facility's capacity to 200 megawatts (MW). Nvidia plans to contribute $1 billion to this initiative, according to financial sources.
The initial 12-week negotiation period between Naver and Brookfield is set to conclude on 14 October 2026, though discussions are expected to continue as they finalise the financial structure and assess commercial viability.
Lenders Weigh Demand, GPU Obsolescence
Despite the involvement of prominent firms like Naver, Nvidia, and Brookfield, major Korean financial institutions remain cautious about funding the project.
Banks including KB Kookmin, Shinhan, Hana, Woori, and state-run Korea Development Bank, alongside securities firms such as NH Investment & Securities, Korea Investment & Securities, and KB Securities, are evaluating participation.
Lenders are concerned about the substantial investment required for graphics processing units (GPUs) and the uncertainty surrounding future demand, utilisation rates, and the rapid obsolescence of AI hardware, financial sources stated. These factors complicate profitability assessments compared to traditional data centres.
Staged Expansion to 1 Gigawatt Capacity
The Gak Sejong facility is planned for a phased expansion. Operations are scheduled to commence at 55 MW in the first half of 2027, increasing to 100 MW by the end of 2027, and reaching 200 MW in 2028. This 200 MW target for the first phase includes housing approximately 100,000 Nvidia GPUs.
Naver's longer-term strategy envisions scaling the AI factory to a much larger 1 gigawatt (GW), five times the current expansion target. This ambitious scale presents further challenges for capital raising and power supply, an industry source involved in project financing noted.
New Risks for Korean Project Finance
The financing of AI data centres tests the capacity of Korea's project finance market to support large-scale AI infrastructure. While AI data centres offer an alternative to a struggling traditional real estate market, they introduce a new risk profile.
Lenders must now assess not only property and power infrastructure but also the volatile demand and rapid technological changes inherent in AI computing. Financial firms are becoming more selective, focusing on projects with stable demand and secured tenants, rather than funding every AI-related venture, according to financial sources.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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