Naver to issue shares to Nvidia in $1 billion AI factory investment

Naver said Friday it will issue 7.24 million new shares to Nvidia, raising 1.48 trillion won ($1.11 billion) in a strategic investment that anchors a $10 billion AI factory project the Korean internet company is assembling with Brookfield.

The board approved the third-party allotment on July 24, and the shares are priced at 204,500 won ($153) apiece, the company said. That is slightly above the reference price of 204,276 won, meaning Nvidia is paying a premium rather than the discount customary in a block sale of new stock.

Nvidia's $1 billion stake is the second leg of the financing. Brookfield will set up a special-purpose vehicle, tentatively named Asset Co., to invest as much as $9 billion in GPUs and data centers and supply the computing capacity to Naver Cloud, with Naver paying usage fees tied to business revenue. Naver Cloud's payment obligation is backed by a guarantee of up to eight years, though the company said the arrangement does not represent an actual outflow of cash.

The transaction traces back to a June 8 meeting between Naver board chairman Lee Hae-jin and Nvidia chief executive Jensen Huang, where the two announced a gigawatt-scale AI factory agreement. That pact took contractual shape on July 22 with Brookfield and on July 24 with Nvidia, and the last precondition was cleared on Oct. 27 when the Brookfield computing-infrastructure deal was signed.

Payment is due Nov. 6, and the new shares are scheduled to list on Nov. 27.

Lee framed the investment in terms of who controls artificial intelligence. "The internet world Naver dreams of is not a world where the internet and AI are dominated and manipulated by one or two groups," he said. "For the diversity of this world to be preserved, different kinds of AI must be built and must be able to operate in every country, group and individual. Through this opportunity, Naver will put more effort into technology and research for such a world, and will cooperate with companies around the globe that share this dream."

The share sale is Naver's first paid-in capital increase in 22 years and its first since it moved its listing in 2008, the company said.