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

According to Zhihui Finance APP, KKR (KKR.US) is betting that South Korea's core position in the global artificial intelligence (AI) supply chain will continue to drive demand across sectors from data centers to power. The private equity giant expects to see more deal opportunities in Korea as it plans to invest about $3 billion in the country this year.

Based on disclosed transaction values and shareholding ratios, the 2026 investment scale sets a new annual investment record for KKR in Korea. In addition to AI infrastructure construction, new investment opportunities are emerging as large Korean conglomerates restructure their business portfolios and show willingness to bring in external investors.

With Samsung Electronics and SK Hynix at the heart of the global AI supply chain—both among the world's largest producers of memory chips—Korea holds a pivotal role. Meanwhile, the AI boom is fueling demand for data centers, power, and other infrastructure, creating new investment opportunities beyond the semiconductor industry.

Chung Ho Park, KKR's Head of Korea, noted that many Korean enterprises are increasingly focusing on their business portfolios and making capital allocation decisions to further invest in core businesses. Chung Ho Park added: "We expect to continue investing around this opportunity, to work closely with Korean companies, and to leverage our comprehensive toolkit to help create value."

As KKR steps up its bets, the size of South Korean private equity investments reached approximately $37 billion by early September, approaching the annual record of $41.4 billion set in 2021. According to data provider Preqin, the rapid advancement of AI is driving capital not only to chipmakers but also further into the infrastructure supporting these companies, while pushing the Korean stock market to historic highs.

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KKR is well positioned to profit from the restructuring of Korean 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 subsidiary of Samsung Group) and also reached an agreement to cooperate on M&A, capital allocation, and AI business expansion with the company.

In another transaction involving a Korean consortium, 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 facets of Korea's infrastructure buildout: investing in data centers to drive power demand, and partnering with SK Group to develop a renewable energy platform to help meet the rising demand for electricity.

Keith Kim, KKR’s Infrastructure Partner, said Korea is one of the most attractive renewable energy markets in Asia, backed by strong corporate demand for clean power from the semiconductor, data center, and manufacturing sectors. He added: “We see this as a long-term opportunity and expect to continue investing through the platforms we have already established in Korea to meet this demand.”

Driven by the chip boom, Korea’s stock market hits record highs this year

For KKR, the $3 billion investment would make Korea one of its top three Asia-Pacific markets by investment size in 2026. Meanwhile, one of KKR's portfolio companies, Musinsa Co., is preparing for its Seoul initial public offering (IPO). The fashion retailer is seeking a valuation as high as 10 trillion won, nearly three times the figure from KKR’s $190 million-led funding round in 2023.

Other buyout firms active in Korea include Blackstone Group (BX.US), which this month teamed up with ESR Group Ltd. to acquire a majority stake in a logistics park, with deal value undisclosed. In June this year, Carlyle Group (CG.US) agreed to acquire Chung Ho Group; TPG (TPG.US) last month agreed to buy a controlling interest in Lotte Rental.

Abundant capital is raising the competitive bar for investment firms. As large sums of investable funds compete for deal opportunities and changes in corporate governance and regulatory environments reshape how transactions are completed, capital alone is no longer enough.

Chan Hee Cho, Vice Chairman of Asia M&A at Bank of America Securities, said: “In this environment, success depends less on access to capital and more on the ability to identify differentiated opportunities and design complex transaction structures.”