Rising AI demand reshapes data centre plans in South Korea

• New PDG and ESR data centres in Incheon expand options for AI and cloud workloads.
• The builds meet growing power, cooling, and sustainability needs.

South Korea is in the middle of a major build-out of cloud and AI infrastructure, and this burst of activity is shaping how data centres are planned across the region. New projects in Incheon show how the market is shifting toward larger sites that can support hyperscale demand and the heavy workloads tied to AI.

Two operators — Princeton Digital Group (PDG) and ESR — are moving ahead with new developments to meet rising enterprise needs. Companies running workloads on AWS, Azure, Google Cloudor IBM’s watsonx are looking for more local capacity to keep latency low, maintain stability, and give themselves more options in a market where space, power, and compliance rules can be tight.

A stronger push for AI-ready sites

AI use is growing quickly across South Korea’s major industries, from factories to banks to consumer apps. This trend is driving interest in data centres that can handle power-hungry racks, liquid cooling, and fast links to nearby cloud hubs. Hyperscalers are adding more presence across the country, which raises expectations for private and hybrid setups that need to sit close to these larger ecosystems.

PDG’s expansion reflects this shift where the company plans to build several campuses totalling up to 500 MW across the country. The first site, a 48 MW project in Greater Seoul, is now under construction. The SE1 campus in Incheon covers around 11,000 square metres and is planned to go live in early 2028. PDG has already secured the power it needs for the site.

Backed by an investment of USD 700 million, SE1 is designed for AI and hyperscale cloud workloads. It will support high-density setups and advanced cooling, and PDG says its plans follow its Net Zero by 2030 and RE100 goals. These issues are becoming more important as enterprises face more checks on the environmental impact of their AI plans.

Why Incheon matters for enterprise expansion

Incheon has become a focal point for cloud and AI capacity because it has stable power, strong fibre routes, and sits close to Seoul’s main tech zones. It also includes the Songdo International Business District, a growing smart-city area expected to draw more AI-driven firms.

Still, South Korea can be a hard market for operators due to limited land, grid constraints, and long permitting processes. PDG’s new projects suggest that operators with the ability to manage these hurdles — and deliver capacity across several sites — may have an edge as workloads spread across the region.

ESR is building alongside this momentum—the company, working with Wide Creek Asset Management, is developing KR1, a nine-storey, 80 MW data centre in Incheon’s Bupyeong district. KR1 is set to open in 2028 and will be leased to PDG. ESR and Wide Creek AMC will handle the shell and core, while PDG will manage the interior build and daily operations.

The realities behind large AI builds

For many organisations, these new sites highlight the practical challenges that come with deploying AI systems. Power supply is becoming a central concern, as dense AI clusters draw far more energy than older virtualised workloads. This means enterprises must include long-term grid plans, reporting needs, and sustainability rules in their due diligence.

Both SE1 and KR1 are being designed with energy use in mind. KR1 aims for LEED Gold certification and plans to use building-integrated solar panels and fuel cells to help offset its consumption. These features match the reporting needs of enterprises that track Scope 2 emissions or follow stricter ESG expectations.

Operational strength is another factor. Large AI projects need more than rack space; they rely on steady network links, reliable cooling, and integrated monitoring. These details often affect the success of early AI work more than model choice or the cloud provider involved. As businesses spread workloads across markets, operators with consistent operational quality across regions stand out.

Strategic implications for enterprise technology leaders

The expansion of PDG and ESR shows how the regional market is concentrating around operators backed by strong investors and experienced in dealing with complex rules. For global companies running multi-cloud or hybrid setups, this means more consistent options when placing AI or analytics workloads close to users.

With the addition of SE1 and KR1, PDG’s portfolio now exceeds 1.2 GW of IT capacity across seven countries. This gives organisations more room to match their workload plans with business goals, such as availability, compliance, performance, or cost. As more companies across Asia Pacific roll out AI-driven operations, demand for this kind of infrastructure is likely to rise.

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