Korean telco SK Telecom is investing $200 million in AI and high-performance computing (HPC) infrastructure business Smart Global Holdings (SGH).

SGH also announced it will be rebranding as Penguin Solutions, applying the name of its AI data center solutions unit across the entire business.

SK will take an equity stake in SGH/Penguin in exchange for the cash, and the companies plan to work together to “leverage their complementary capabilities to enhance customer offerings in the development of differentiated global end-to-end AI factory and data center solutions and services, advanced memory market products and services, and NPU-based AI Edge servers.”

California-based SGH markets a host of platforms and services for HPC, AI, machine learning, fault-tolerant computing, and the Internet of Things that span the continuum of Edge, core, and cloud.

Through its Penguin Solutions business, which it acquired in 2018, the company offers integrated AI data center solutions ranging from the design of AI clusters consisting of large-scale GPU servers to expertise in data center deployment and operation.

Mark Adams, CEO of SGH, said the company was “thrilled” to welcome SK Telecom as a strategic investor.

Adams said: “Today’s announcement is a testament to Penguin Solutions’ capabilities in the deployment of AI factories at scale through our systems, software, and managed services suite of solutions. We look forward to executing on these strategic collaboration opportunities with the SKT team and believe they will create value for our respective stakeholders.”

SK Telecom will receive 200,000 preferred shares in SGH, which it can convert to ordinary shares at a later date at a price of $32.81 each. The company has been expanding its AI portfolio in recent months, and last year invested $100 million in Anthropic, the company behind the Claude large language models.

Earlier this year it also participated in a $320 million Series C funding round for another AI company, Lambda Labs.

“Our investment in and cooperation with SGH will give us an opportunity to boost our position in the AI value chain,” said Ryu Young-sang, CEO of SKT. “In the era of AI transformation, we plan to continue to collaborate and make proactive investments to achieve global leadership in AI.”