Nvidia has announced that it will supply 260,000 units of its latest GPUs to South Korea, underscoring the country’s emerging role in the global AI landscape. The announcement, made during the Asia-Pacific Economic Cooperation summit in Gyeongju on October 31, includes significant allocations to major Korean companies: 50,000 GPUs each to the government, Samsung, SK, and Hyundai Motor, alongside 60,000 units for Naver Cloud. This landmark distribution marks a pivotal moment in Korea’s competitive race in artificial intelligence, as GPUs are essential for training AI models, thus enhancing their capabilities.
The question arises: Why did Nvidia opt for such an unprecedented allocation to Korea? In a world where countries are vying for high-performance GPUs, the strategic significance of Korea is rooted in its dominance of high-bandwidth memory (HBM) production. Currently, over 90 percent of global HBM is produced by Korean companies, primarily SK Hynix and Samsung Electronics. This gives Korea a critical edge in GPU production and supply chain stability, making it an indispensable partner for Nvidia.
The need for advanced infrastructure also plays a crucial role in this decision. Nvidia’s GPUs require robust data center environments, and Korea boasts some of the world’s most advanced AI data centers, known for their power grid stability and reliable transmission capabilities. The Korean government is actively developing long-term solutions to mitigate the power consumption of AI data centers, further solidifying its position as a viable location for large-scale AI research.
On October 30, during an event at COEX in Seoul marking the 25th anniversary of the GeForce GPU launch, Jensen Huang, CEO of Nvidia, emphasized the importance of Korean companies in creating a “new industry called AI.” He described Korea as a key testing ground for next-generation physical AI applications. Major players like Hyundai Robotics, Naver Labs, and KAIST are expected to utilize the GPUs to establish large-scale “AI factories” capable of training and operating sophisticated machine learning systems.
South Korea’s major tech firms, including Samsung, SK, Hyundai, Kakao, and Naver, are well-positioned to integrate these high-performance GPUs into real-world industrial applications. These companies already operate semiconductor fabrication plants and cloud platforms, highlighting their ability to absorb and deploy accelerated computing technologies at scale. This operational readiness not only signals a heightened focus on AI but also demonstrates Korea’s existing industrial ecosystem’s capability to leverage these advancements effectively.
However, the rapid expansion of physical AI also raises significant challenges, particularly concerning energy consumption. A set of GB220 graphic cards is estimated to consume about 132 kilowatts, meaning the 260,000 GPUs secured by Korea could demand around 480 megawatts of electricity—equivalent to the output of a medium-sized thermal power plant. This potential surge in energy consumption could necessitate the construction of additional power plants, compounding existing economic and environmental concerns.
Despite these challenges, the rise of physical AI presents a promising opportunity to address one of Korea’s pressing issues: its declining population and workforce. By automating repetitive and physically demanding jobs, physical AI could help mitigate labor shortages. Goldman Sachs predicts that up to 50 percent of jobs may be fully automated by 2045, positioning Korea to be at the forefront of this technological shift.
As Nvidia commits to this substantial GPU allocation, it highlights the geopolitical dimensions of its choice. With the U.S. facing power grid shortages and China restricted by export controls on advanced GPUs, Korea stands out as one of the few U.S.-aligned nations with a vital semiconductor supply chain and the industrial capacity to scale physical AI solutions. This combination of HBM production, power infrastructure, and advanced manufacturing capabilities uniquely positions Korea to effectively utilize Nvidia’s most advanced systems.
In Huang’s words, “Korea’s leadership in technology and manufacturing positions it at the heart of the AI industrial revolution—where accelerated computing infrastructure becomes as vital as power grids and broadband.” This partnership signals a new chapter in the global AI landscape, with Korea being viewed not merely as a market for Nvidia’s technology but as a strategic ally in the development and deployment of physical AI.
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