South Korean AI data center industry development

In South Korea, stakeholders in the AI Data Center (AIDC) industry are advocating for tax credit reforms. During a policy forum at the National Assembly, representatives from companies such as SK Telecom and Kakao argued that current tax laws, which limit a 15% credit for national strategic technology to companies using facilities for internal consumption, create a loophole. Because AIDC business models rely heavily on colocation and leasing computing power to external clients, industry leaders claim they are currently unable to benefit from these incentives.

Academic experts have proposed increasing the credit rate to 20% to match semiconductor incentives and expanding coverage to include cloud facilities and cooling equipment. While the Ministry of Economy and Finance has maintained its stance on limiting credits to self-use R&D, officials have acknowledged the need to review whether AIDC infrastructure support is essential for the domestic AI ecosystem.

In response to the evolving regulatory landscape and the upcoming implementation of a special law for AIDC next March, the law firm Shin & Kim has launched an ‘AIDC Infrastructure Center’. This center aims to provide integrated legal services for large-scale projects in the AI and semiconductor sectors, offering expertise in areas such as site selection, power supply procurement, AI governance, and complex financial structuring.