SK Billionaire Joins Other Tech Leaders in AI Demand Confidence

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00:00So much on the table right now at this summit, how much is at stake for global businesses during this conversation here in Gyeongju?

00:09Well, the whole APEC represents about 60% of the world's GDP.

00:15So the size of the market is huge, and as you know, there's a lot of interesting things going on.

00:22And U.S., China together, and the two presidents are going to meet tomorrow.

00:26So we don't know the outcome yet, but I hope that that meeting is here.

00:32So that's one of the things, and all the medias and the peoples watch out what it's going to be in the future.

00:41So that's probably one thing.

00:43And even today, U.S. government and our Korean government met, and I hope that they're going to finish up the world's type of things.

00:51And I just heard that really good news.

00:54President Trump just said that, well, he's expected a really good outcome.

00:58What sort of outcome do you expect?

01:00I'm not sure, because I'm not the one who negotiates any details.

01:04But I informed that even the Korean government and the U.S. government side, they said it's okay.

01:11So it's kind of a done deal.

01:13There's a big focus when it comes to the power of artificial intelligence right now.

01:18Tell us a little bit about the potential for South Korea as a tech-dependent economy when it comes to the AI rally.

01:28Well, of course.

01:29If you compare to U.S. or China, so Korea is a small stake, and we don't have that much resources to invest in, or even AI side.

01:40So right now, AI has required large resources, too much maybe.

01:47So on the Korean side, we could actually provide several solutions.

01:55One is the test bed.

01:57So our side is good for the test.

02:01So even if there's a physical AI, and the bio side, and even the regulations, we could be the really good test bed for the AI.

02:11So also, our Korean citizen, I guess at the world, we are the number one who adapted the new technologies.

02:19So whoever wants to, using their AI test, so Korea is the ideal locations and the positions.

02:28So that's the one thing, and we could actually offer to the whole world, to the world who wants to develop the AI side.

02:36The other is about solution for the cost side.

02:40Right now, the cost of the AI is too much.

02:44That's why people are just saying that, well, there's a lot of bubbles, and we expect a lot of bubbles.

02:50But if you really try to understand that this is just early stage, right now, even though there is some bubble,

02:57and I think that the whole technology and the market will pick it up,

03:02only challenge is we don't really provide a lot of solutions for the application yet.

03:08So once we catch up to that application market, then, well, yes, this AI is something else.

03:17So you do think that there is some bubble, or at least a little bit of a froth when it comes to the AI sector right now?

03:23Yes.

03:24What are some of the risks of that, and do you expect that froth to come down, or the bubble to pop?

03:31There's two different sides of the competitions.

03:34Well, in early stage, there is the company-to-company competitions.

03:39But these days, there's a kind of national competition, sobering competitions.

03:43So everybody has to have their own security.

03:47They have to actually make their own AI infrastructures and AI ecosystems.

03:53Even EU, Japan, well, Australia, so you just name it, and everybody is thinking about the new strategy for the AI.

04:03That actually makes it another market and another possibility.

04:06So, well, people just believe that this is going to be another bubble.

04:10But, well, if you are in the player, then I don't really see that there was that much bubble.

04:17There is a lot of potential.

04:18Still, there is some danger because we put it in a lot of money and end up, I don't know, five to ten years later.

04:24In the long run, if there is not enough outcome, then we have some trouble.

04:30Is that a concern for SK Group?

04:32We understand that you do have a deal with NVIDIA to get those chips as well.

04:37Yes.

04:37How big is the size of that deal at this point?

04:40The memory side, we're actually making a lot of memory chips.

04:46And, well, the way they evolve in the AI side is, well, AI requires a lot of memory capacity.

04:54Right now, it's a transition period to reasoning AI to the agentic AI.

05:00So, when you enter into that agent AI, so it's not the person to AI communications, it's just agent to agent communication.

05:10So, that requires that there was a huge size of the memory capacity in the future.

05:15So, with that kind of reasoning, I don't really think that there is not much risk on us.

05:22But problem is that the whole market failed.

05:24So, that's another big risk.

05:26And, well, there is still a possibility that the whole market failed, but not the short long.

05:33So, I see that if you come out to some kind of outcome, it probably takes it, I don't know, 7 to 10 years later.

05:42So, what do you think of the South Korean government's initiative right now to secure, what, 200,000 GPUs by 2030?

05:52Does that pose a risk of just being overly ambitious?

05:56I don't think so.

05:58So, this government wants to use AI for everybody.

06:02So, if that's the kind of case, and we need that, well, that kind of computing power.

06:08So, anyhow.

06:09So, even though the Korean market demand is not enough, and we could actually serve to the other nation's market, too.

06:19Well, that's how we actually invest with, well, Amazon, that we make that AI data centers.

06:25We just announced it at the 100 megawatt type of initial stage for that AI data centers.

06:32But, well.

06:32That was the announcement back in June.

06:34That was around $4 billion.

06:36Yes.

06:37There's another announcement this week that's another $5 billion investment.

06:41Is SK Group involved in that, too?

06:43We are planning for that, the 1 gigawatt, so it's 10 times bigger than the $4 to $5 billion.

06:50U.S. Trade Representative Greer was saying, as an example, that if a smartphone is made in South Korea but exported to Australia,

06:58they could face the threat of having to get Chinese approval if it contains even a trace amount of rare earths.

07:05Should the likes of SK and other Korean businesses prepare for that eventuality?

07:11Well, rare earths are what kind of problems, but it's a matter of price.

07:17So if you pay a little more of the price, you can actually get into a lot of other sources from the rare earths.

07:24Even the U.S. has the world, you own the rare earths, the programs, and I guess that there is a lot of rare earths in other areas, too.

07:33So I don't really think that the world is going to be a real weapon.

07:37But right now, in the short term, the price matters.

07:41So you have to actually pay that more price.

07:45So it's cost issues.

07:48Yeah, because the development of rare earths takes time, right?

07:52The supply chain that's away from China that controls about 90% of it.

07:55But the usage of the world, the smartphone, the usage of the world, the smartphone, is not a really huge one.

08:07So I don't think that that's a real problem yet.

08:11So I don't think that's a real problem yet.

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