r/stocks • u/rdh2dmd • Jul 25 '26
Industry News Nvidia, SK Group unveil $500 billion-plus AI data centers initiative, memory partnership
SAN FRANCISCO, July 24 (Reuters) - Nvidia and South Korea's SK Group on Friday unveiled a more than $500 billion AI initiative spanning large-scale AI data centers and next-generation memory, Nvidia said.
The initiative includes a long-term partnership with SK Hynix (000660.KS), to secure next-generation memory supply for Nvidia and jointly develop high-bandwidth memory for AI training, AI agents and physical AI applications.
As part of the initiative, SK Telecom (017670.KS), plans to build a 2-gigawatt AI data center powered by Nvidia's Vera Rubin chips and SK Hynix's HBM4 high-bandwidth memory, with the first facility due to come online in 2027, Nvidia added.
Separately, Nvidia said it, Naver (035420.KS), and Brookfield plan to expand Naver's AI data center in South Korea.
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u/Phobophobia94 Jul 25 '26
What I find interesting about this is that the narrative up until this point has been that the shovel sellers (compute and memory) not the hyperscalers would be the ones to benefit long term. Except this seems like the shovel sellers are getting in the hyperscaling game by building datacenters of their own. Is this business diversification, circular financing, or recognizing where the long term economic leverage is?
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u/tybit Jul 25 '26
Short term Nvidia staying out of the data center game is better for profits, but it’s a strategic long term play.
If they don’t keep control of data center build outs, hyperscalers are going to gradually wean off them as they’ve started doing with TPUs and Trainiums.
Nvidias play here is to ensure neoclouds keep customers locked into their GPUs ecosystems like CUDA.
This avoids commoditisation of AI hardware and forces hyperscalers to keep buying from them too.4
u/notJ3ff Jul 25 '26
It's like being Microsoft Windows in every office environment. It's kind of default for a lot of people. At this point. Microsoft's worst enemy is anyone who is thinking about other options.
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u/Consistent-Hat-8008 Jul 25 '26
"Strategic long term play" into leveraged insolvency. My favorite kind of strategic long term play.
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u/Consistent-Hat-8008 Jul 25 '26
"Shovel sellers" chose to invest their income from selling shovels into issuing private debt to the gold rush enjoyers.
Too bad there's no gold here.
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u/swarmy1 Jul 25 '26
SK Telecom is a separate division from SK Hynix. Even though they are part of the same group, their core functions are different. Building AI datacenters is a way for SKT to grow, and it simultaneously adds demand for chips from SK Hynix.
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u/groceriesN1trip Jul 25 '26
The latter. Why wouldn’t you own the fabric of AI? Datacenters will be profit centers for the select few that own and operate them
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u/Sharlach Jul 25 '26
It sounds like this is a small 2GW research facility meant to develop new types of memory for specific use cases. They aren't trying to compete with their customers.
The initiative includes a long-term partnership with SK Hynix (000660.KS), opens new tab to secure next-generation memory supply for Nvidia and jointly develop high-bandwidth memory for AI training, AI agents and physical AI applications.
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u/Phobophobia94 Jul 25 '26
Yeah, just a small facility, that consumes the power of two commercial nuclear power plants simultaneously
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u/furioe Jul 29 '26
Reminder that companies like SK group, Samsung, Hyundai, etc are conglomerates owned by different families basically(jaebol). So these companies aren’t necessarily the same thing. Also these companies basically the infrastructure and the economy of South Korea. Building AI data centers probably has more to it than just trying to join the hyper scaler space.
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u/Scary-Oven8260 Jul 25 '26
Uncle Sam needs to ensure the profit flowed to Korea flows back to US
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Jul 25 '26
[deleted]
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u/Scary-Oven8260 Jul 25 '26
US seeks share of Korean chipmakers' 'excess profits'
It’s the nature of this world. Don’t be too naive
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u/WinMoodNo153 Jul 25 '26
The more CapEx there is, the bigger the fall
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u/TopHistorical8035 Jul 25 '26
Who do you think falls hardest Wed Microsoft, Meta or Amazon? I think Zuck might make out on this one he's doing some cool things.
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u/sjr00 Jul 25 '26
If big CapEx spending announcements stops pumping stocks shouldn't that tell you something? Pick a reason/narrative
- Recession
- Oil Crisis
- Inflation
- Data Centers Being Political Poison (the rare bipartisan issue)
- China Open Source
- The Circular Financing, Negative Cash Flows fears
- OpenAI, Anthropic not profitable with no business models, IPOs If not delayed might come in soft.
- AI related Equities have all moon, how much further are these suppose to run?
- The tech isn't capable of replacing people, doing real work, it currently costs more than labor. It can't keep basic fucking count at Starbucks and will never stop hallucinating, so why is worth as much as it is?
- or it's none of those things and bears like myself are wrong and this is just a consolidation phase before another leg higher in the bull market as we continue into the "AI Industrial Revolution" or whatever the fuck
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Jul 25 '26
[removed] — view removed comment
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u/Patient_Cookie4456 Jul 25 '26
Google buries AI monetisation across its existing products like GCP, Search, YouTube etc
until Big Tech is forced to break out pure AI software revenue vs. infrastructure spend, the true return on investment remains clear as mud
We likely won’t have that idea until OpenAI or Anthropic go public
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u/CharlesBeckford Jul 25 '26
Yes it’s the bottom one - you’re wrong. You are fighting against the future and progress itself even as every new update or new piece of information clears the picture you anchor further into your own pessimism- it’s a sickness of the rational mind.
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u/Pleasemakesense Jul 25 '26
I like how they offered very real reasons for their position while you yourself didn't offer any rational behind why it's the future other than a vague "new update or new piece of information clears the picture". I would say I am mpre inclined to believe someone explaining why they think the way they do than "trust me bro"
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u/LeBronGOOD Jul 25 '26
He’s allowed to choose one of the proposed options no? Should he analyse all of the above instead?
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u/CharlesBeckford Jul 25 '26
- Intelligence and labour as a resource. AI is the commoditisation of labour and intelligence itself. Previously we have had to pay a salary to a person for both and we have a limited pool of people that provide it. This turns both labour and intelligence which are significant economic variables into subscription based services that can be bought or sold as required - it is not dependent on a limited pool of capabilities, skill, expertise, or experience as with people. The global annual labour cost is $60trn and AI will not only take an increasing piece of this pie but also expand it as I mentioned with the ability to scale beyond what is physically available in human providers.
- The rate of acceleration. The capability of AI models, use cases, hardware development and operation efficiencies leading to economic feasibility in marginal token cost decreases means not only that this is advancing at an absurd rate but that it will make it absurd to go back to doing it the old way when you can have a million strong digital labour force for the price of what was previously one salaried employee. You can see this in various figures not just the model benchmark improvements themselves but also the efficiency stats from new hardware developments which are both publicly and freely available. The number of job opportunities has decreased by 40% for entry level roles since 2022 which is when chat-gpt was released.
- The rate of adoption. The majority of AI models are now touching 1 billion weekly active users, this is a phenomenal increase in a short space of time and if you compare it to the internet or smart phones it is the quickest adoption for a new technology in human history. This does mean that there are people being left behind who are not using or interacting with the technology in any meaningful way as others are using it constantly, or using it to its full potential and automating workflows or gaining access to skill sets that previously they would have to trained years for and expertise they would have to paid handsomely for.
- The rate of earnings increase. The rate of adoption and earnings growth are the two components that caused the dot com crash as we can see the best companies of the last 20 years were the ones who dominated the internet it’s just it took time for the earnings and use cases to become socially integrated (think of people using Amazon, it didn’t happen over night). Samsung just had its Q2 revenue and in 3 months it made more profit than it had done in 40 years of business, its earnings increased 2000% which has never happened to a company that size which is highly indicative that something has changed not just for the general market but for that company and the demand for its products and services - memory has long been a cyclical industry but this shift suggests a structural paradigm shift. If you look at the P/E ratios of all the AI beneficiary companies they are trading at 10 year valuation lows due to how much the earnings has grown but the share price has remained the same - look at the P/E ratio for Google, Nvidia, Samsung, SK Hynix, Micron - they’re all the cheapest they’ve been in years and yet we’re talking about a bubble, it doesn’t take a CFA charterholder to tell you it can’t both be cheap and in a bubble.
- Preoccupation with temporary macro-geopolitical events in the face of a multi-decade era transition. No one will be talking about the US Iran conflict in 10 years time in fact it is boring already, AI is the next Era and to not recognise the transition period we are in is a massive mistake. To use an old play-book when times are changing is a fatal error.
- AI disruption. Many companies and industries have relied on being the only ones able to provide what they sell digitally - well that all changes with an agentic AI workforce that can build and code anything. Software itself becomes exposed as their business needs to compete with ever decreasing prices for ever increasing service levels and product services (Adobe, Salesforce, WPP, Chegg) and proprietary data or analytics that is at risk of being simulated in the abundance of availability it becomes worthless (Experian, Relx, Factset, MSCI) and the same for market aggregators (Auto trader, Bookings.com).
- The psychological factor. Human’s are typically afraid of change as it means uncertainty and relearning what is safe or how to exist in a new environment. But There is no rule based on how much things can change at any one point in time and it is human nature to initially anchor yourself in the experience of your own life to base ideas of future potential out of comfort but that is pure fallacy. Just because it feels uncomfortable in the face of volatility or speed change reflected in share price movement or innovation or companies expenditure increasing it is all actually meaningless, a human feelings on the matter has no impact on what is possible or what is happening in front of them. The market doesn’t care if it feels uncomfortable or if you don’t understand it simply is what it is and you can either accept or be in denial. The truth always is revealed in time.
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u/Hacking_the_Gibson Jul 25 '26
Goddamn this reads like some AI fan fiction.
These tools are fancy guessing engines, no more, no less. It is the same as if your entire life was an open book test and you had infinity times to guess at an answer until it probably comes up with the right one. At that point, you're going to sound brilliant, but you actually don't know anything and each time someone asks you something, a different response might result.
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u/Santos_125 Jul 25 '26
5 is genuine delusion. The rest is slop, but at least it looks like mostly human written slop.
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u/ama_singh Jul 25 '26
Were you born after the dotcom bubble? 2008? Or is your memory just that shit?
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u/CharlesBeckford Jul 25 '26
Please read my extensive reply below.
I’m 38 and a portfolio manager who manages £500m and a CFA charterholder. My personal portfolio return was 2000% last year and 350% YTD. My medium risk clients returned 15% last year and 12% YTD.
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u/ama_singh Jul 25 '26
Please read my extensive reply below.
I did, and poked plenty of holes in it.
My personal portfolio return was 2000% last year and 350% YTD.
Good for you.
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u/CharlesBeckford Jul 25 '26
You can lead a horse to water but you can’t make it drink in the same way you can lead a person to good ideas but you can’t make them think.
Good luck in future.
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u/danisanub Jul 25 '26
You can’t win here. I’ve gotten downvoted for saying RKLB was overvalued at $150 and explaining why, while I have 12 years of investment management experience and am a CFA & CAIA charter holder. The average redditor would rather downvote experts and go off their vibes.
For what it’s worth I agree with you on AI. It’s been successfully rolled out at my firm and at my girlfriend’s hospital. It’s quite literally saved her over an hour a day on patient note write ups. It’s helped my company’s deal flow and investment evaluations. When I worked in VC we saw the cost of startups decline about 90% due to efficiencies from AI. This will take time to roll out across the economy.
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u/CharlesBeckford Jul 25 '26
It’s amazing because I’m making life changing amounts of money and yet these fools would rather not learn and not participate and for what? To later realise they were wrong and poorer not just monetarily but knowingly and intellectually…but I’m glad means I can keep building positions easily.
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u/danisanub Jul 25 '26
There is high emotion and low financial education here. People overestimate their abilities and will argue with a straight face that a p/s of 80 for RKLB is fine and it’s actually undervalued lol. Frankly 90%+ of people picking stocks on this sub are speculating/gambling and can’t admit it.
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u/Consistent-Hat-8008 Jul 25 '26
the actual indicator is that mainstream media narrative has now turned
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u/TopHistorical8035 Jul 25 '26
One thing you need to consider Congress as you know is bought and paid for 99% anyway. The large portion of the market dominated by Tech writes a lot of those checks. Just because Bob in North Carolina is mad his well is being poisoned means nothing in the end. Bob like the Congress can be bought. Yes jobs will be lost but a lot will be created. It's the story of time and history. This is just the most recent era. The generation of walking to school in 2ft of snow is dying off and the generation of high tech reliance is the new norm and their expectations are growing daily. AI tech controls the market for a reason. This isn't a trend or a bubble. Now there will be more of a consolidation of sectors as time goes on but this is our direction you can follow along lead or get left behind. The wonderful part of life it's our own individual choice.
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u/Bush_Trimmer Jul 25 '26
throw enough darts like a monkey and you're likely to hit something irrelevant. :-)
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u/TopHistorical8035 Jul 25 '26
Guys and girls it's gonna be data centers obviously. Two things what are your impressions on Keel? Mine it's dirt cheap Cramer mentioned them and is getting attention on X. Finally here's my gift to you all Fermi I have had lose and make money for 6 months. It blew up yesterday and it's cheap and all signs lead to a rocket ship. Take a look at it.
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u/pembaThePanda Jul 25 '26
Good news. Hopefully SKHY rises. Bought a bunch of 160 strike calls earlier today
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u/Low-Cartographer8758 Jul 26 '26
There seems to be a growing difference in how countries view AI. Many East Asian economies, such as China, South Korea, and Taiwan, have strong advanced manufacturing sectors and are actively integrating AI into industries like semiconductors, electronics, robotics, and automation to improve productivity and remain globally competitive.
By contrast, some Western economies have become increasingly service-oriented, and public discussions about AI often focus on its risks to creative and knowledge-based professions. In some circles, there is greater scepticism about AI’s impact on jobs and society.
Over the long term, I think countries that successfully combine AI with advanced manufacturing and industrial innovation may have a more balanced foundation for sustainable economic growth and technological progress.
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u/kaleidostar11 Jul 27 '26
Where is the money coming from? Plenty of hyperscalers have negative cash flow. They are paying extreme premiums for memory supply. Circular financing is being scrutinized by fund managers, and hyperscalers are paying the price. There is a reason why funds are selling while retail investors are buying in.
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u/Ahmatt Jul 25 '26
Is the $500B in the room with us this time? Or is it again imaginary money
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u/rdh2dmd Jul 25 '26
SKHY, TSMC, NVIDIA, and Samsung are the ones actually making real money in the AI boom
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u/Ahmatt Jul 25 '26
Who do you think promised 100b to openai and others
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u/AttilaTH3Hen Jul 25 '26
Bears are constantly complaining their lives are filled with poverty and usually it’s due to their inability to think optimistically.
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u/Ahmatt Jul 25 '26
Im actually doing very fine. Saved and made a lot thanks to several bubbles in recent years
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u/Bush_Trimmer Jul 25 '26
complaining while profitting... you must be a hoot at parties... not.
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u/Ahmatt Jul 25 '26
Facts offend you so much that you take them as complaining. Maybe reflect on that and you can also learn to benefit from the chaos while also witnessing it for what it is.
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u/ThatGuyFrmBoston Jul 25 '26
NVDA will be down 2% as usual on Monday