SK Telecom to Spin Off AI Data Center Business as SK Horizon

SK Telecom announced Thursday that it will spin off the artificial intelligence data center and submarine cable operations of its subsidiary SK Broadband into a new company called SK Horizon, deepening its bet on AI infrastructure as a growth engine.

Under the plan, SK Broadband will be split into two entities: a surviving SK Broadband that keeps the company's fixed-line, media and enterprise businesses, and the newly created SK Horizon, which will house the AI data center and submarine cable assets. Based on the book value of net assets, the split ratio between the two companies works out to roughly 0.84 for SK Broadband and 0.16 for SK Horizon.

To fund the new venture, SK Telecom has lined up outside investors. US private equity firm KKR and a consortium made up of South Korea's IMM Investment and Stonebridge Capital will together inject 3.08 trillion won (about $2.23 billion) into SK Horizon. Once the investment closes, SK Telecom will hold a 51 percent stake and retain management control, while KKR takes 29 percent and the IMM-Stonebridge consortium holds the remaining 20 percent.

SK Horizon will inherit eight operating data centers located in Seocho, Ilsan, Bundang, Gasan, Centum, Yangju and Pangyo, along with AI-dedicated facilities currently under construction in Ulsan and Guro. Combined, these sites represent roughly 318 megawatts of capacity, which the new company plans to expand along with its submarine cable network to support SK Telecom's overseas AI ambitions.

The restructuring is designed to clarify roles across SK Telecom's AI infrastructure operations. SK Telecom itself will focus on overall strategy and partnerships with major global technology firms, SK Horizon will run and expand existing data center and cable infrastructure, and a separate unit, SK Hyper, launched last month, will lead the development of new large-scale AI data centers, with targets of 5 gigawatts of capacity by 2029 and 15 gigawatts by 2035.

Current SK Broadband CEO Kim Seong-soo is expected to lead SK Horizon as well, pending approval from the new company's board once it is formally established. Kim described the move as "a proactive measure aimed at strengthening expertise and enabling faster execution" in the AI data center business, adding that the goal is to grow SK Horizon into Korea's leading data center operator.

SK Telecom said it aims to complete the spin-off in the first quarter of next year, subject to regulatory approvals and an extraordinary shareholders meeting.