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SK Telecom targets $18.5 billion in AI revenue by 2028

South Korea's SK Telecom (SKT) will triple investments in AI over the next five years in an effort to cash in on the hype.

Nick Wood

September 26, 2023

3 Min Read
Artificial Intelligence Concept. Microprocessor with the letters AI.
Artificial Intelligence Concept. Microprocessor with the letters AI.

South Korea’s SK Telecom (SKT) will triple investments in AI over the next five years in an effort to cash in on the hype.

It has launched the ‘AI Pyramid Strategy’, which paves the way for SKT to become a global AI company – at least that’s what it hopes the plan will do.

There are three layers to this pyramid: AI infrastructure, AI transformation, and AI service.

AI Infrastructure represents the bottom layer. It consists of AI data centres, AI semiconductors and multi large language models (multi-LLMs), and forms the foundation of the new strategy.

When it comes to data centres, SKT has a plan to almost double its existing capacity by 2030 in order to host more AI-based services and workloads. It aims to keep a lid on energy consumption by using liquid cooling systems and hydrogen fuel cells.

SKT’s AI chip making arm, Sapeon, will also introduce a new inference AI chip, the X330, by the end of this year. Inference chips are designed specifically to handle AI workloads, and SKT claims the X330 offers approximately twice the computational performance and 1.3 times the power efficiency compared to what’s available today.

The last part of the infrastructure element is multi-LLM, a two-pronged approach under which SKT is working on its own LLMs, and partnering with AI companies like Anthropic, OpenAI, and Korean big data specialist Konan Technology to participate in the development of their LLMs.

The middle layer of the pyramid is AI Transformation (AIX).

Similar to digital transformation (DX), it will see SKT use AI to overhaul its existing core businesses, like mobile and fixed broadband, and enterprise services. It will also use AI as a springboard into adjacent verticals that stand to benefit from AI, like transportation – including urban air mobility – healthcare, and media and advertising.

Finally, SKT marked the launch of its new strategy with the commercial rollout of its personal AI assistant, ‘A.’, which forms the top layer of the pyramid, AI Service.

Based on its in-house LLM, A. will power a range of offerings, not the least of which is a phone service that can recommend numbers to call based on a user’s call history, and that can listen to a phone conversation and provide a written summary of it afterwards. It also promises to do nifty stuff like automatically add appointments to a calendar based on what’s being said during a call.

A. will also underpin a new sleep management solution, ‘A. sleep’, that analyses sleep patterns to determine the ideal wake-up time based on a person’s sleep status and quality. The idea is to help people start their day in the best possible way.

Then there is A. music, which recommends songs that match a user’s tastes based on a generative customer prediction model.

SKT said based on how things go in Korea, it aims to offer its AI assistant as a service to global partners.

It all sounds very ambitious – and expensive – hence why SKT is tripling its investments in AI. On a global stage, it also faces stiff competition from some of Silicon Valley’s heaviest hitters, like OpenAI and Google, to name just two. However, it reckons the pay-off could be huge: as much as KRW25 trillion ($18.5 billion) in AI-related revenue by 2028.

“Destructive innovation triggered by generative AI is already creating new value in all areas of industry, society, and life. With our AI Pyramid Strategy, we will make accelerated moves to strengthen our own capabilities and cooperate with diverse partners, and expand our AI-related resource investments,” said SKT CEO Ryu Young-sang, in a statement. “Through these efforts, we aim to become a global AI company that benefits customers, increases industry productivity, and solves social problems with innovative technologies and services.”

 

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About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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