Alibaba Cloud is gearing up to open its second data center in South Korea by the end of June 2025, in response to the increasing demand for AI infrastructure in the region. This move is part of the company’s efforts to expand globally and keep pace with the rising interest in generative AI tools and services.
“Our continued investment in local infrastructure is tied to the growing use of AI technologies in different industries,” said Yoon Yong-joon, Alibaba Cloud’s country manager for South Korea. “The new data center will help customers run more flexible and reliable systems built for AI.”
Data centers are vital in cloud computing, providing users with access to storage, software, and hardware over the internet. In South Korea, the demand for this infrastructure is rapidly increasing. Analysts estimate that the country’s data center market was valued between US$5 billion and US$9.6 billion in 2024, with projections nearing US$10 billion by 2030. Seoul remains a key hub, supported by network density, major enterprise users, and public-sector backing.
The growth in edge computing is also expected to accelerate, with the local market projected to grow from US$178 million in 2024 to over US$2.2 billion by the end of the decade. National initiatives focused on AI, smart cities, and digital services have further fueled this momentum.
Alibaba Cloud entered the Korean market in 2016 and launched its first data center in Seoul in 2022. The company now operates 87 availability zones in 29 regions. Its facility in Seoul was tailored to meet local data handling requirements and reduce latency for customers. By establishing infrastructure locally, Alibaba Cloud has been able to provide alternatives to larger US providers like AWS and Microsoft Azure. Its services are utilized in various sectors including e-commerce, logistics, gaming, and AI.
In South Korea, companies like Univa and the Naver-backed app Snow have leveraged Alibaba Cloud’s AI models to enhance their services. Snow offers real-time features such as video filters and AR tools, which are gaining popularity in Asia. Univa utilizes cloud-based AI to enhance its enterprise offerings, aiding in speeding up model training and inference.
Alibaba’s broader investment in AI has been steadily increasing. According to the South China Morning Post, the company has allocated over US$50 billion for the next three years to bolster its AI infrastructure – roughly equivalent to half of the initial investment in the US-based Stargate AI initiative. Its open-source Qwen models have garnered recognition among developers, and the cloud unit remains a crucial component of the group’s long-term strategy.
In the first quarter of this year, Alibaba Cloud’s revenue surged by 18% to 30.13 billion yuan (approximately US$4.15 billion), marking its fastest growth in three years.
