SK Telecom CEO Ryu Young-sang (left) and Lambda CEO Stephen Balaban pose for a photo at Lambda's headquarters in San Jose, California, in January. (SK Telecom)

SK Telecom, South Korea's largest wireless carrier by membership, said on Wednesday that it will open an artificial intelligence data center in Seoul in December by joining hands with US-based graphics processing units-as-a-service provider Lambda.

The decision comes as the two sides signed a partnership deal for a joint AI cloud business as they agreed to establish a large-scale Nvidia GPU cluster to support AI cloud business opportunities here, according to SK Telecom.

Lambda is a company that offers AI cloud services using the latest GPUs from Nvidia. Top big tech firms like Intel and Microsoft are among Lambda's customers.

“Given the rapid pace of innovation in AI happening in South Korea, we’re excited to partner with SK Telecom and support their effort to grow and develop their AI cloud expertise in the region,” said Lambda CEO and co-founder Stephen Balaban.

The two sides will deploy Nvidia GPU clusters in the Gasan data center of SK Broadband, SK Group’s internet service providing unit, in western Seoul, by the end of the year. These clusters will be based on Lambda’s cloud computing platform, which is accelerated by Nvidia.

Under the deal, the Korean telecom carrier plans to increase the number of GPUs to thousands of units within three years, considering the rapid rise in domestic GPU demand driven by the growth of the AI market.

“We will build Korea's largest GPU farm to enhance national AI competitiveness and position ourselves as a gateway to the global market,” said Kim Kyeong-deog, vice president and head of enterprise business division at SK Telecom.

SK Broadband has implemented a power density of 44 kilowatts per rack, the highest in Korea, to ensure stable GPU server operation. SK Telecom said that this is approximately nine times the average power density per rack in domestic data centers.

With the opening of the AI data center, Lambda's Korean region will also be launched for the first time in the Asia-Pacific region. Data from domestic companies using Lambda's GPU-based AI cloud services will be stored in Korea.

SK Telecom also plans to launch a GPU-as-a-service -- or GPUaaS -- cloud-based service that provides access to GPUs for computation and rendering purposes, utilizing Lambda's GPU resources.

According to market research firm Fortune Business Insight, the global GPUaaS market is projected to grow from $4.31 billion this year to $49.84 billion by 2032.