Korea's telecommunications provider KT Corp and Microsoft have agreed a multibillion-dollar five-year artificial intelligence (AI) partnership.
The deal will see KT provide $450 million worth of network and data center infrastructure to Microsoft over the next 15 years.
Signed on September 19, the agreement will also see KT invest in AI, cloud technologies, and IT business, along with a resource commitment from Microsoft in terms of people and infrastructure.
The partnership aims to propel KT's AI and ICT transformation, as well as to advance AI services in South Korea.
KT and Microsoft will develop a customized version of OpenAI's GPT-4o AI model, and look into an amended version of Microsoft's Phi small language models using KT's data that will be tailored to the Korean language and culture. These will be used for KT's internal and consumer-facing applications.
The two companies are working on Secure Public Cloud services in South Korea which would be KT’s sovereign cloud solution built on Microsoft Cloud for Sovereignty for Korean-regulated industries such as public and financial sectors.
Additional commitments were made to develop an AX-specialized service company and to develop a co-innovation center targeting AI transformation in the country.
Microsoft will also provide more than 19,000 employees with cloud and AI skills, and help more than 5,800 AX specialists to lead a successful transformation through KT.
“The partnership with Microsoft presents a pivotal opportunity, not only for technological collaboration but also for expanding Korea’s AI foundation and driving transformative innovation across industries and daily life,” said KT CEO Young-Shub Kim. “Leveraging this strategic partnership, we aim to rapidly evolve into an AICT company with unparalleled competitiveness in domestic and global markets.”
“Our strategic partnership brings together KT’s industry expertise with the power of our entire tech stack, from Azure AI to Microsoft 365 Copilot,” said Satya Nadella, chairman and CEO of Microsoft. “Together, we will help accelerate the AI transformation of Korean organizations across the private and public sectors and build new AI-powered experiences for millions of consumers.”
KT and Microsoft signed a strategic partnership back in June 2024 that would see close cooperation on AI projects and services. This latest announcement is a follow-up after ongoing discussions.
Microsoft launched two cloud regions in South Korea – the Central region in Seoul and the South region in Busan – in 2017. In 2021 the company added additional Availability Zones in Seoul. The south region seems to have since been reestablished as a Network PoP dubbed PUS03.
Earlier this year, Alibaba announced that it was looking to establish additional data centers in South Korea within the next three years. Further details were not shared.
