SKT sets AI strategy and targets $18.5B AI revenues by 2028

SK Telecom (SKT) yesterday said it will triple AI-related investment from 12% to 33% over the next five years, as South Korea's largest wireless carrier by subscription joins the AI bandwagon targeting revenues from the technology amounting to KRW25 trillion (US$18.5 billion) by 2028.

"The AI gold rush has begun. Since telecom operators have no legacy, the AI revolution is a definite opportunity for us. We'll create business models that a telecom operator can do to be competitive in the market," said Ryu Young-sang, CEO of SKT, during a press conference in Seoul.

The company unveiled its "AI Pyramid Strategy" that will buttress SKT's ambition to become "a global AI company.'' The three-pronged strategy focuses on the areas of AI infrastructure, AI transformation and AI service.

"Destructive innovation triggered by generative AI is already creating new value in all areas of industry, society, and life. With our AI Pyramid Strategy, we will make accelerated moves to strengthen our own capabilities and cooperate with diverse partners," said Ryu.

Let's talk pyramids

At the bottom of the AI pyramid is SKT's AI infrastructure consisting of AI data centers, AI semiconductors and multi-large language models (multi-LLM). They serve as the foundation of the company's new strategy.

Related:SKT invests $100M into 'safe' AI firm Anthropic

SKT plans to almost double its data center capacity by 2030 to host more AI-based services and workloads that generate higher margins. It will address the issue of energy consumption by introducing immersion cooling systems and hydrogen fuel cells.

On the semiconductor side, SKT is set to launch the next-generation inference AI chip "X330" at the end of the year through its AI semiconductor arm, Sapeon. The X330 has approximately twice the computational performance and is being touted to have 1.3 times the power efficiency compared to what is available in the market today.

On the multi-LLM side, SKT will be building its own LLM technologies while it continues to collaborate on them with partners such as Anthropic, OpenAI and Konan Technology.

SKT has invested $100 million in Anthropic to develop LLM customized to telcos, while it invested   KRW22.4 billion ($16.6 million) in Konan Technology to enter the enterprise market with LLMs built for corporate customers. With Open AI, SKT is co-hosting an AI hackathon in South Korea.

Transforming core businesses with AI

SKT's core business segments such as mobile, broadband and enterprises – which sit in the middle of the telco's AI pyramid strategy – are set to undergo a series of major changes. At the same time, the telco operator will be expanding into new business areas such as mobility, AI healthcare, media and advertising technology.

In the mobile business, AI will be used not only to acquire and retain customers but also to provide better customer support via AI Contact Centers (AICCs).

These AICCs will also be deployed at the network infrastructure level to enhance the efficiency in network deployment and operation.

"The company expects that, in the mid-to long-term, AI will help reduce 20% to 30% of costs compared to the current level," SKT said in a statement.

Plan 'A'

At the top of the AI pyramid is "A," SKT's personal AI assistant service that was officially launched yesterday.

"A" will power a range of offerings, including an AI phone service that will provide a call summary as well as schedule tasks in the user's calendar based on the content of the call. More features such as real-time interpretation during calls will also be added in the future.

"A" will also provide a sleep management tool and a music service that can automatically create a user's playlist.

The Korea Herald reported that SKT also plans to roll out a personal AI assistant roaming service that can provide about 1.2 billion telecom users in 45 countries, based on its global alliance formed in July. The telco operator joined hands with Germany's Deutsche Telekom, the United Arab Emirates' e& and Singapore's Singtel to expand AI cooperation.

"Just as we subscribe to two to three over-the-top platforms these days, telecom users are expected to use two to three personal AI assistants within the next three years," the newspaper wrote, quoting SKT chief Ryu. "The personal AI assistant market will likely become a battleground for leading global firms in the near future."