SK Telecom CEO Ryu Young-sang (left) and Smart Global Holdings CEO Mark Adams pose for a photo during the signing event for a strategic investment in California on Sunday. (SK Telecom)

SK Telecom, South Korea's largest wireless carrier by membership, said Tuesday that it has signed a contract to invest $200 million in Smart Global Holdings, a US company specializing in data center integration solutions.

Under the terms of the agreement, SKT will acquire 200,000 preferred shares and secure about 10 percent ownership through conversion to common stock.

This marks the telecom giant’s largest investment in the artificial intelligence sector. With this investment, the amount SKT has invested in the AI sector since last year surpasses $300 million.

California-based Smart Global Holdings was listed on Nasdaq in 2017, and last year, its sales reached nearly $1.44 billion.

It specializes in AI data center integration solutions and manages AI clusters built with large-scale GPU servers. The company is involved in businesses including edge solutions and specialized memory modules for industrial sites.

The company has deployed a total of 75,000 GPUs. Last year, the US firm constructed Meta's Research Super Cluster of 16,000 GPUs. It was recently chosen to operate an AI cluster with 24,000 GPUs by Voltage Park, a next-generation GPU cloud service provider there.

The Korean telecom carrier decided to invest in Smart Global Holdings in response to the increasing demand for professional AI data center solutions, driven by the need for large quantities of GPUs for developing large language models and the growing complexity of building AI clusters.

The two firms plan to enter into a collaboration this year that emphasizes establishing more concrete cooperation across the AI infrastructure business, including AI data centers, edge AI and future memory solutions.

Additionally, they intend to develop telecommunications edge AI solutions that integrate communication infrastructure with AI, tailored for industrial-specific edge solutions and aimed at global expansion.

The Korean telecom giant, aiming to penetrate domestic and global AI data center markets, anticipates synergy by incorporating Smart Global Holdings' expertise in constructing and operating AI clusters into solutions like data center management systems and liquid immersion cooling.

“We are thrilled to have SK Telecom as a strategic investor,” Smart Global Holdings CEO Mark Adams said. “We look forward to executing these strategic collaboration opportunities with the SK Telecom team and believe it will create value for our respective stakeholders.”

“Our investment in and cooperation with Smart Global Holdings allow us to boost our position in the AI value chain,” SK Telecom CEO Ryu Young-sang said. “In the era of AI transformation, we plan to continue to collaborate and make proactive investments to achieve global leadership in AI.”

By Jie Ye-eun (yeeun@heraldcorp.com)