SK Telecom, LG Uplus Rebound in Q1 Driven by AI Data Center Growth

South Korean telecommunications giants SK Telecom and LG Uplus have both announced a significant turnaround in their first-quarter financial results, largely attributable to the booming Artificial Intelligence (AI) data center sector. This performance marks a welcome return to profitability for SK Telecom, which saw its operating profit jump an impressive 351% from the previous quarter, reaching 537.6 billion won. This surge not only signals a recovery but also brings the company back to the 500 billion won quarterly profit mark not seen in a year.

The driving force behind this success is the robust growth in their AI data center (DC) operations. SK Telecom reported an 89.3% year-on-year increase in AI DC revenue, reaching 131.4 billion won. This expansion was fueled by higher utilization rates and the growing success of their 'GPU-as-a-Service' (GPUaaS) offering, which provides essential Graphics Processing Units (GPUs) for AI computations via the cloud. Complementing this, SK Broadband, a subsidiary, also posted a healthy 21.4% rise in operating profit. The company's commitment to customer value and strategic AI business focus was highlighted by its CFO, Park Jong-seok.

LG Uplus mirrored this positive trend, reporting a 1.5% increase in operating revenue and a 6.6% rise in operating profit compared to the same period last year, reaching 272.3 billion won. Their AI DC segment also experienced substantial growth, with revenue up 31.0% to 114.4 billion won, significantly contributing to the overall performance of their enterprise infrastructure division. Both companies are signaling a continued commitment to investing in AI data centers to sustain this growth momentum.

From a South Korean perspective, as reported by Dong-A Ilbo, this focus on AI infrastructure is not just about financial returns; it's about positioning the nation at the forefront of the global AI revolution. While Western media might focus on the financial metrics, local coverage emphasizes how these investments are building the foundational digital infrastructure necessary for future technological advancements. The expansion into AI DCs signifies a strategic pivot, leveraging existing telecom networks to capture new, high-growth markets. Both SK Telecom and LG Uplus are actively pursuing AI-related business opportunities, with SK Telecom establishing a dedicated enterprise division and LG Uplus focusing on accelerating its Design, Build, Operate (DBO) services and exploring new AI ventures. This strategic alignment with national technological goals makes the AI DC sector a particularly compelling story for the Korean market.

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It was a meaningful period where we strengthened our fundamental competitiveness centered on customer value and recovered profitability through a streamlined AI business.