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Naver Chairman Lee Hae-jin and Nvidia CEO Jensen Huang shake hands after signing a $1 billion strategic investment agreement at Nvidia headquarters in California, U.S., on July 24 local time. Photo provided by Nvidia

Naver announced on July 27 that it has signed a $1 billion strategic investment deal with Nvidia through a third-party allotment paid-in capital increase, aiming to secure leadership in the global AI infrastructure market.

The strategic investment agreement was signed on July 24 local time at Nvidia headquarters in Santa Clara, California, with Naver Board Chairman Lee Hae-jin, Naver CEO Choi Soo-yeon, and Nvidia CEO Jensen Huang in attendance. On the same day, Chairman Lee also attended the government-hosted San Francisco K-AI Summit held at The Midway in San Francisco.

Chairman Lee stated that by securing investments from Nvidia and Brookfield, Naver has gained a springboard opportunity to scale up its accumulated data center operational technology and know-how onto the global stage, and will actively collaborate with companies worldwide to realize an AI ecosystem where the diversity of nations and groups is respected.

Naver explained that with this contract, it has secured a strategic advantage by quickly resolving the prerequisite challenges of GPU procurement and equipment sourcing, which are core pillars of the AI factory business.

Nvidia's investment comes as a follow-up measure to the gigawatt-scale global AI factory construction agreement announced by the two companies last June. This is the first time in 22 years that Naver has pursued a third-party allotment paid-in capital increase, and its first since listing on the KOSPI in 2008. Through the $1 billion investment (approx. 1.4809 trillion won), Nvidia will acquire a 4.5% stake in Naver, or 7,241,564 common shares, with payment due on October 30. The investment holds significance in that both companies have established a strategic partnership for the success of the AI factory business.

In addition, through a preliminary contract with Brookfield, a global alternative asset manager handling over $1 trillion, Naver will reliably secure state-of-the-art GPUs and data centers to operate AI factories of several hundred megawatts. Brookfield is a frontier investment firm in AI infrastructure, including data centers and renewable energy. Through this collaboration, Naver will be able to preemptively secure large-scale compute infrastructure even amid global GPU supply shortages.

Naver's subsidiary Naver Cloud is also in positive discussions over an AI Compute Partnership agreement to jointly pursue the global AI factory business with Nvidia. Through an integrated partnership spanning technical alliances, demand, and capital, Nvidia is expected to participate as a joint venture entity with Naver Cloud.

Industry observers evaluate that Nvidia's unusual decision to invest directly in Naver stems from Naver's immediately actionable full-stack AI capabilities. Naver has directly operated every aspect of the AI factory, including data centers, GPU clusters, AI platforms, as well as proprietary models and services. Having commercialized Nvidia's supercomputing infrastructure for the first time in the world in 2019, Naver has internalized all key data center technologies such as cooling, power, and networking to fit AI workloads based on over 20 years of infrastructure operation experience.

This turnkey infrastructure directly translates into speed. In addition to its own data centers, Naver has preemptively secured and operated GPU floor space across 20 locations nationwide, with plans to shorten the period from resource acquisition to service launch to under a month by building a standardized server system. As speed emerges as a key requirement for enterprises, this is expected to serve as a powerful competitive edge for Naver.

Furthermore, Naver operates a large cluster of around 100,000 GPUs, the largest scale in South Korea, realizing predictable and efficient infrastructure operations through automated resource management and recovery, along with 100% monitoring. Based on these capabilities, Naver already provides enterprise services to hundreds of thousands of clients and stands as the sole provider of large-scale GPUaaS in South Korea, earning recognition as one of the few key global players capable of leading the sovereign AI business.

Building on this global collaboration, Naver plans to generate revenue from its AI factory business starting in 2027. Beginning operation of a 55MW global AI factory in the first half of 2027, Naver expects to bring the capacity to 200MW by 2028 before rapidly expanding it to 1GW as a launching pad. Through this strategy, Naver aims to absorb demand for sovereign AI infrastructure across the Asia-Pacific, European, and Middle Eastern markets.

CEO Choi Soo-yeon stated that the investments from Nvidia and Brookfield will serve as an important turning point for Naver's future growth, adding that it is very encouraging to create an opportunity to swiftly enter the global AI infrastructure market through Naver's technology and infrastructure starting from this investment. She further noted that Naver will also conclude client acquisition for the AI factory at a rapid pace, making this a pivotal moment to jump forward as a major player in the global AI infrastructure sector.

Meanwhile, Naver will also carry out a large-scale treasury share retirement to enhance shareholder value. Naver disclosed on the same day that its board of directors decided on July 24 to retire 4.9 million treasury shares worth approximately 1 trillion won on August 3.

                                                                                                           Kim Young-jin