Shares of South Korea's Naver Corp climbed 8% on Monday after the internet giant disclosed that Nvidia Corporation will acquire $1 billion in newly issued shares. The investment is part of a strategic partnership to develop a large-scale artificial intelligence data center, underscoring Nvidia's deepening commitment to AI infrastructure beyond its core chip business.
At the time of writing, Naver shares were up 8.43%, reaching their highest level since June 22. The rally sharply outpaced the broader KOSPI index, which fell 1% on the day, reflecting strong investor enthusiasm for the deal.
Nvidia investment to support data center expansion
According to a regulatory filing, Nvidia will purchase newly issued shares in Naver, with the proceeds earmarked to finance the development of an AI data center. The facility, being built in partnership with Brookfield, is expected to operate using Nvidia's AI computing hardware. Naver said the funding will allow it to more than triple the size of the data center, highlighting the growing focus on building infrastructure capable of supporting surging AI computing demand.
The investment is part of a broader partnership announced by Nvidia last week, aimed at accelerating the deployment of AI infrastructure beyond its traditional base of hyperscale cloud customers. The deal lifted sentiment toward Naver, with the stock gaining significantly even as the wider South Korean market moved lower.
Nvidia expands South Korean AI partnerships
Nvidia has also expanded its alliance with SK Group, South Korea's second-largest conglomerate. Under that partnership, the companies plan to build more than two gigawatts of AI data center capacity across South Korea. The broader initiative is expected to generate over $500 billion in business through purchases of memory chips and AI supercomputers.
These developments point to a wider push by Nvidia to support AI infrastructure in South Korea, as demand for AI computing capacity drives investment in data centers and related technologies. The announcements coincide with South Korean President Lee Jae Myung's visit to Silicon Valley, as Nvidia expands its investments across different parts of the AI supply chain.
Nvidia seeks broader AI infrastructure reach
Nvidia has invested billions of dollars in AI infrastructure in recent months, including AI startups, semiconductor suppliers, and data center projects. CEO Jensen Huang has pushed for countries to develop sovereign AI capabilities, aiming to reduce reliance on a limited number of hyperscale cloud providers. Nvidia's partnerships in South Korea form part of this wider effort to expand access to AI computing infrastructure.
For Naver, the Nvidia investment provides funding to significantly expand its planned data center and strengthens its position within the country's growing AI infrastructure ecosystem. The deal also highlights the increasing importance of AI data centers as a key driver of corporate investment, with companies like Nvidia and SK Hynix working to address memory bottlenecks in AI systems.
Investors are closely watching how AI spending impacts broader markets, with some analysts warning that the surge in AI-related capital expenditure could add inflationary pressure, complicating the Federal Reserve's rate path. Meanwhile, Indian power stocks have surged on AI data center demand, though valuation concerns are mounting.
The Nvidia-Naver deal underscores the rapid expansion of AI infrastructure globally, with South Korea emerging as a key hub. As Nvidia continues to invest across the AI supply chain, its partnerships with local players like Naver and SK Group are likely to shape the future of AI computing capacity in the region.
This article is for informational purposes only and does not constitute financial advice.
