Samsung SDS Rapidly Emerges as 'AI Infrastructure Powerhouse' with OpenAI Partnership

[Korea Financial Times, Jeong Chaeyun] Samsung SDS (CEO Lee Jun-hee) is establishing its presence in the artificial intelligence (AI) ecosystem. The company plans to leap forward as an emerging powerhouse in the AI industry by recently joining OpenAI's Stargate project and submitting solo bids for government-led AI projects.

According to Korea Exchange on the 12th, Samsung SDS closed at KRW 173,300 the previous day. Compared simply with the stock price of KRW 146,300 in early September, this represents an increase of approximately 18.5%.

Industry analysts attribute this to heightened expectations as Samsung SDS has successively participated in AI-related projects both domestically and internationally.
On the 1st of last month, Samsung SDS signed a comprehensive partnership Letter of Intent (LOI) with OpenAI. An LOI is a document where companies formalize mutual cooperation intentions before formal contracts. Samsung Electronics, Samsung C&T, and Samsung Heavy Industries also participated in this LOI.


Through this, Samsung SDS will cooperate with OpenAI in two main areas: ▲Stargate project ▲provision of enterprise ChatGPT services.

The Stargate project is a massive AI data center (DC) construction project led by OpenAI, Oracle, and Japan's SoftBank. Samsung SDS will collaborate in the design, construction, and operation of OpenAI's AIDC in Pohang, North Gyeongsang Province.

Additionally, Samsung SDS is expected to service enterprise ChatGPT to corporate customers based on its experience building and operating business systems for manufacturing, finance, and public institutions. The company plans to optimize and supply the advanced enterprise ChatGPT developed through the Stargate project to various industrial environments in Korean society.
Beyond external partnerships, its domestic activities are also noteworthy. On the 21st of last month, Samsung SDS independently submitted a business proposal for the third round of the 'National AI Computing Center' and successfully won the bid. The Samsung SDS consortium includes Kakao, KT, and Naver Cloud.


The National AI Computing Center project is a large-scale public infrastructure project where the government and private sector jointly establish a special purpose company (SPC) to secure large-scale graphics processing unit (GPU) infrastructure and provide computing resources to industry, academia, and startups. The location has been confirmed as Solaseado in Haenam-gun, South Jeolla Province.

Through this project, the government plans to secure 15,000 GPUs by 2028 and expand to more than 50,000 by 2030. The center aims to support research institutions and startups in conducting large-scale AI training and service development at low cost.

As the sole bidder selected, Samsung SDS will take a leading role in the total KRW 2.5 trillion project. As consortium representative, it will oversee infrastructure construction and operation, and overall project management, expected to gain experience in executing large-scale public cloud and AI projects. It is also evaluated as having enhanced government policy execution capability and strategic business positioning.

Samsung SDS is already solidifying its position in the AI ecosystem by building AIDCs. The AIDC that Samsung SDS is constructing in Gumi, North Gyeongsang Province, is a large-scale standalone AIDC that the company will operate independently. Revenue is expected to be generated by leasing the AIDC to Samsung affiliates or external customers or supporting services. The AIDC is expected to begin operations between late 2027 and early 2028.

Lee Ho-joon, Samsung SDS Cloud Service Business Division Head (Vice President), emphasized at the Q3 earnings conference call, "We plan to jointly plan and operate advanced AIDCs of the future with OpenAI and are currently in discussions," adding, "In terms of AI services, we will pursue consulting and operation businesses to introduce OpenAI models into enterprise business systems, diversifying our AI business portfolio and contributing to cloud sales growth."

He continued, "We expect to lead domestic AI transformation business by combining our (Samsung SDS's) 40 years of domestic IT experience with OpenAI's global technology."

Meanwhile, Samsung SDS recorded consolidated sales of KRW 3.3913 trillion and operating profit of KRW 232.3 billion in Q3 this year. These decreased 5% and 8.1% respectively year-over-year. Net profit during the same period increased 8.2% to KRW 201.1 billion.

Jeong Chaeyun (chaeyun@fntimes.com)