Korea to build 600 billion won AI data center in Pohang

South Korea will build a 600 billion won ($453 million) artificial intelligence data center in Pohang, the finance ministry said Wednesday, as the government pledged to ease polarization widening across industries, regions and generations during the AI transition.

The project, backed by the ninth project of the Regional Revitalization Investment Fund, is targeted for completion in November next year and the start of operations in January 2028. The government plans to move quickly on related procedures, including an exemption from the local finance investment review.

The announcement followed the first joint meeting of the government's economic ministers and science and technology ministers, co-chaired by Finance Minister Lee Hyung-il and Science Minister Bae Kyung-hoon.

"The driving force behind our economic growth is science and technology innovation, and from original technology research and development through demonstration and commercialization to the fostering of new industries, science and technology policy and economic and industrial policy must now move as one," Lee said.

The government also plans to require companies with 100 or more employees to fund retirement benefits externally, starting in 2028 after a preparation period next year, to prevent unpaid severance. It will introduce a fund-type retirement pension, with licensing and supervision shared between the labor ministry and financial authorities, and will change the evaluation of pension operators to focus on pension suitability and returns. The timing of notification for the default option will be moved to two weeks before maturity from four weeks after. Detailed measures will be announced Thursday after consultations with the ruling party.

The government will also consolidate systems now spread across 243 local governments into cloud environments at the level of the 16 provinces and metropolitan cities, standardizing documents and data for AI use. Orders are due at the end of 2026, with the systems to open in stages between 2028 and the end of 2029.

Under the seven SEED projects, the government will link ministry programs and investments around core missions rather than individual projects, with a public-private Frontier Board to reflect private demand. An implementation plan is due within the year, with full execution from next year.

Bae said cooperation across ministries is essential if technological development is to lead to new industries and markets. "With today's first joint meeting as the occasion, we will pool the capabilities of science and technology and economic policy to create new growth engines," he said.

The government also approved a strategy to spread AI through the maritime and fisheries sectors, including automated port systems and innovation zones for smart fisheries, and said it would end on Oct. 31 a notice banning hoarding of urea, urea solution, syringes and needles, citing stable supply and market conditions.