Private equity giant KKR (KKR.US) bets $3 billion on South Korea's AI supply chain! Targeting data centers and power demand.

KKR (KKR.US) is betting that South Korea's central role in the global artificial intelligence (AI) supply chain will continue to drive demand across areas from data centers to power. The private equity giant expects more deal opportunities in South Korea as it deploys about $3 billion into the country this year. Based on calculations using disclosed deal values and ownership stakes, the 2026 investment scale sets a record for KKR's annual investment in South Korea. Beyond AI infrastructure buildout, new investment opportunities are emerging as South Korea's large conglomerates reshape their business portfolios and show willingness to bring in outside investors. South Korea sits at the core of the global AI supply chain thanks to Samsung Electronics and SK Hynix, two of the world's largest memory chip makers. At the same time, the AI boom is spurring demand for data centers, power and other infrastructure, creating new investment opportunities beyond the semiconductor industry. Chung Ho Park, head of KKR South Korea, said many Korean companies are increasingly focusing on their own business portfolios and making capital allocation decisions to further increase investment in core businesses. Chung Ho Park added: "We expect to continue investing around this opportunity, working closely with Korean companies and using our full toolkit to help create value." As KKR ramps up its bets, South Korea's private equity investment volume had reached about $37 billion as of early September, approaching the annual record of $41.4 billion set in 2021. According to data provider Preqin, the rapid development of AI is pushing capital from chip makers further toward the infrastructure needed to support these companies, while also helping South Korean stocks hit historic highs. South Korea's buyout deals are recovering, with total transaction value approaching the record set in 2021 KKR has positioned itself to profit from the restructuring of South Korea's large conglomerates. For example, KKR invested 1.22 trillion won (about $880 million) in convertible bonds issued by Samsung SDS (the IT services and digital logistics solutions subsidiary of the Samsung Group), while reaching an agreement to work with the company on M&A, capital allocation and AI business expansion. In another deal involving a South Korean chaebol, KKR partnered with local funds to jointly invest 3.08 trillion won in SK Telecom's newly established data center business. This allows KKR to participate in two aspects of South Korea's infrastructure buildout at the same time: on one hand, investing in data centers and driving growth in power demand; on the other, building a renewable energy platform with SK Group to help meet growing power demand. Keith Kim, a partner in KKR's infrastructure business, said South Korea is one of Asia's most attractive renewable energy markets, underpinned by strong corporate demand for clean power from semiconductors, data centers and manufacturing. He added: "We see this as a long-term opportunity and expect to continue investing through the platform we have already built in South Korea to meet this demand." South Korean stocks hit historic highs this year, driven by the chip boom For KKR, the $3 billion investment scale will make South Korea one of the company's three largest markets in Asia-Pacific by investment size in 2026. Meanwhile, Musinsa Co., one of KKR's portfolio companies, is preparing for an initial public offering (IPO) in Seoul. The fashion retailer is seeking a valuation of up to 10 trillion won, nearly three times the level at the time of the $190 million financing led by KKR in 2023. Other buyout firms doing deals in South Korea include Blackstone Inc. (BX.US). This month, it teamed up with ESR Group Ltd. to acquire a majority stake in a logistics park, with the transaction amount undisclosed. In June this year, Carlyle Group Inc. (CG.US) agreed to acquire Chung Ho Group; TPG (TPG.US) agreed last month to acquire a controlling stake in Lotte Rental. Abundant capital is raising the competitive bar for investment firms. With a large pool of dry powder competing for deals, and changes in corporate governance and the regulatory environment reshaping how transactions get done, having money alone is no longer enough. Chan Hee Cho, vice chairman of Asia M&A at Bank of America Corp, said: "In this environment, success will depend less and less on access to capital and more on the ability to uncover differentiated opportunities and design complex transaction structures."