British AI Firm Nscale Targets Two or More Data Centers in Korea

By Marcus Bennett

British AI infrastructure company Nscale plans to build two or more AI data centers in South Korea. The firm set up a dedicated local entity in July and is weighing every investment route, from new construction to leasing space in other companies' facilities, The Seoul Economic Daily confirmed on the 12th.

What has Nscale actually done so far?

The company established Nscale Services KR in July this year. The entity handles data center investment, development, operation and management. It is completing the procedures required to begin operations in Korea.

Nscale launched in 2024. It is a neocloud operator: it buys graphics processing units directly and runs AI data centers with them. The company is valued at about $35 billion, roughly 47 trillion won. It is also preparing an initial public offering on a U.S. exchange.

Its one confirmed Korean project sits in Gumi, North Gyeongsang Province. The original plan called for a consortium to build a 300-megawatt facility in a first phase. Nscale and the other participant revised that plan so each would build its own data center instead. Nscale's facility is now going through permitting ahead of groundbreaking.

Why is the company looking beyond Gumi?

The change to the Gumi project prompted the push for additional sites, according to people familiar with the matter. Nscale is examining three approaches:

• greenfield development of new sites;
• brownfield conversion of existing facilities;
• colocation, meaning leased space in third-party data centers.

The company expects Korea's sovereign cloud market to grow rapidly, sources said, and it is drawing up its plans on that assumption.

One industry official, who asked not to be identified, pointed to Nscale's overseas playbook: it retrofits older data centers already in operation and installs GPU servers in them to ease the capital burden. "There is a strong chance it will propose this type of partnership to Korean companies as well," the official said.

Who else is building in Korea?

Nscale is not alone. U.S. neocloud company CoreWeave is pursuing a data center in Korea and appointed Kim Hyun-seok, formerly of Microsoft and SoftBank, as head of Korean operations last year. Amazon Web Services plans to start operating an AI data center it is building with SK Group in Ulsan next year. Microsoft recently began construction on its third Korean data center, in Busan, according to people familiar with the matter.

What does the U.S. election shift change for Korea?

Industry watchers expect Asia to benefit as data center construction in the United States slows after the midterm elections. Goldman Sachs estimated that Democratic wins in state and local elections could subject about 45% of planned U.S. AI data center capacity to regulatory impact. Democratic gubernatorial candidates elected in Texas, Georgia and Ohio have signaled tighter rules on data center construction. On a conference call on the 11th, CoreWeave said it is diversifying regional regulatory risk by expanding overseas in Canada, Europe and Asia.

Can Korea win the bidding?

Electricity rates are the decisive factor. Asia offers plenty of alternative sites, including India, Southeast Asia and Japan. Attracting foreign operators depends on how much Korea can cut the enormous power bills that come with running AI data centers, industry officials said. Others argue the country must make grid connection and permitting timelines more predictable.

The government is pursuing a differential pricing system that would vary electricity rates by region, along with a separate rate plan for AI data centers.

Local authorities face a practical constraint. An official at a local government that has attracted a foreign operator's AI data center said authorities want to cut rates quickly but cannot set them flexibly, because approval from Korea Electric Power Corp. is still required. "For a data center to go beyond its initial operation and add capacity as demand grows, the rules need to be overhauled so that cheaper electricity rates can be guaranteed," the official said.

What does this change for Korea's infrastructure market? Potentially a lot. A $35 billion operator is shopping for sites, competitors are already breaking ground, and the bottleneck is now policy, not capital.