How Korea is trying to take control of its AI future.
Updated
January 13, 2026 10:56 AM

SK Telecom Headquarters in Seoul, South Korea. PHOTO: ADOBE STOCK
SK Telecom, South Korea’s largest mobile operator, has unveiled A.X K1, a hyperscale artificial intelligence model with 519 billion parameters. The model sits at the center of a government-backed effort to build advanced AI systems and domestic AI infrastructure within Korea. This comes at a time when companies in the United States and China largely dominate the development of the most powerful large language models.
Rather than framing A.X K1 as just another large language model, SK Telecom is positioning it as part of a broader push to build sovereign AI capacity from the ground up. The model is being developed as part of the Korean government’s Sovereign AI Foundation Model project, which aims to ensure that core AI systems are built, trained and operated within the country. In simple terms, the initiative focuses on reducing reliance on foreign AI platforms and cloud-based AI infrastructure, while giving Korea more control over how artificial intelligence is developed and deployed at scale.
One of the gaps this approach is trying to address is how AI knowledge flows across a national ecosystem. Today, the most powerful AI foundation models are often closed, expensive and concentrated within a small number of global technology companies. A.X K1 is designed to function as a “teacher model,” meaning it can transfer its capabilities to smaller, more specialized AI systems. This allows developers, enterprises and public institutions to build tailored AI tools without starting from scratch or depending entirely on overseas AI providers.
That distinction matters because most real-world applications of artificial intelligence do not require massive models operating independently. They require focused, reliable AI systems designed for specific use cases such as customer service, enterprise search, manufacturing automation or mobility. By anchoring those systems to a large, domestically developed foundation model, SK Telecom and its partners are aiming to create a more resilient and self-sustaining AI ecosystem.
The effort also reflects a shift in how AI is being positioned for everyday use. SK Telecom plans to connect A.X K1 to services that already reach millions of users, including its AI assistant platform A., which operates across phone calls, messaging, web services and mobile applications. The broader goal is to make advanced AI feel less like a distant research asset and more like an embedded digital infrastructure that supports daily interactions.
This approach extends beyond consumer-facing services. Members of the SKT consortium are testing how the hyperscale AI model can support industrial and enterprise applications, including manufacturing systems, game development, robotics and autonomous technologies. The underlying logic is that national competitiveness in artificial intelligence now depends not only on model performance, but on whether those models can be deployed, adapted and validated in real-world environments.
There is also a hardware dimension to the project. Operating an AI model at the 500-billion-parameter scale places heavy demands on computing infrastructure, particularly memory performance and communication between processors. A.X K1 is being used to test and validate Korea’s semiconductor and AI chip capabilities under real workloads, linking large-scale AI software development directly to domestic semiconductor innovation.
The initiative brings together technology companies, universities and research institutions, including Krafton, KAIST and Seoul National University. Each contributes specialized expertise ranging from data validation and multimodal AI research to system scalability. More than 20 institutions have already expressed interest in testing and deploying the model, reinforcing the idea that A.X K1 is being treated as shared national AI infrastructure rather than a closed commercial product.
Looking ahead, SK Telecom plans to release A.X K1 as open-source AI software, alongside APIs and portions of the training data. If fully implemented, the move could lower barriers for developers, startups and researchers across Korea’s AI ecosystem, enabling them to build on top of a large-scale foundation model without incurring the cost and complexity of developing one independently.
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The US$50.8 million deal strengthens TECO’s push into modular infrastructure and faster data center deployment across Southeast Asia.
Updated
May 26, 2026 5:39 PM

Kuala Lumpur, Malaysia. PHOTO: UNSPLASH
TECO Electric & Machinery is expanding further into Southeast Asia’s AI data center infrastructure market through a new acquisition in Malaysia.
The Taiwan-based company has signed an agreement to acquire approximately 78 percent of Malaysian engineering firm Dynaciate Engineering in a deal valued at around MYR 200 million (US$50.8 million). According to TECO, the acquisition is aimed at strengthening its modular data center manufacturing capabilities and supporting its expansion across Southeast Asia’s data center infrastructure sector.
Under the agreement, Dynaciate will become TECO’s global manufacturing hub for modular data center and power equipment products. The company will also serve as an engineering hub supporting TECO’s regional expansion efforts, particularly in AI data center infrastructure projects.
TECO Chairman Morris Li said the integration between both companies has improved execution efficiency and increased the company’s in-house modular prefabrication capabilities. According to the company, the collaboration has reduced data center delivery timelines to as little as six months.
Dynaciate is headquartered in Johor Bahru, Malaysia. Its facilities span approximately 36,000 square meters and include eight production buildings focused on stainless steel and carbon steel fabrication. The company said the site is also eligible for export tax incentives that support future global supply chain deployment.
According to TECO, Dynaciate has experience in engineering, steel fabrication and large-scale industrial projects for multinational corporations. The company added that Dynaciate has expanded into the data center engineering market since 2025 through projects involving international cloud service provider clients.
TECO estimates that after the acquisition, around 65 percent of future data center-related revenue will come from modular data centers and prefabricated products, while the remaining 35 percent will come from AI data center engineering projects. The company also forecasts that data center-related revenue within its Power & Energy Business Group will rise from below 10 percent to 30 percent this year.
Dynaciate CEO Ng Kim Thiea said the company is entering a new phase of growth through the partnership with TECO. He added that Dynaciate has extensive experience supporting engineering and industrial projects across the region.
The acquisition marks a further expansion of TECO’s presence in the AI data center infrastructure sector as companies continue increasing investments in modular infrastructure and regional engineering capacity.