Naver's $10 billion Sejong build tests whether Korean lenders will hold GPU risk

Brookfield's ceiling of $9 billion and Nvidia's planned $1 billion add up to the full $10 billion cost of taking Gak Sejong to 200 megawatts ^[20]. On those figures the financing package covers 90% of the bill and Nvidia a tenth ^[21]. The Korea Herald report does not describe an equity cheque from Naver, and the final structure, including how much Korean institutions put up, is still under discussion ^[7]. Spread across the roughly 100,000 GPUs the site is meant to hold ^[4], $10 billion comes to about $100,000 per chip with buildings, power and cooling included, or $50 million per megawatt ^[22][25].

Nvidia is putting a tenth of the money into a facility built around its own GPUs ^[21][4]. The lenders weighing a slice of the package face a harder calculation. A conventional data center loan rests on a building leased for years to a large cloud provider ^[12]. Here a substantial portion of the cost is chips, and chips can become outdated much faster than the building around them ^[11]. Rapid advances also make their residual value hard to estimate several years into a financing period ^[11]. Lenders finance cash flows, not corporate names, the Korea Herald noted ^[19], so the case rests on whether utilization and workloads produce enough recurring revenue to justify the upfront spend ^[10].

Revenue arrives in stages. The site is due to open at 55 MW in the first half of 2027, about 27.5% of the target, then reach 100 MW by the end of that year and 200 MW in 2028 ^[5][23].

"Adding GPU costs to data center development means the funding requirement can reach trillions of won, making large-scale financing unavoidable," an industry source involved in project financing told the Korea Herald ^[13]. "But lenders cannot move quickly because there are still questions over real demand for AI data centers and GPUs and whether the investment will translate into corporate earnings," the source said ^[14].

The possible participants split into two kinds of balance sheet. KB Kookmin, Shinhan, Hana and Woori banks and the state-run Korea Development Bank are considering taking part, and NH Investment & Securities, Korea Investment & Securities and KB Securities are weighing it too ^[8]. The brokers could arrange and underwrite portions, earn fees and sell down to other investors ^[9]. A broker that sells down is paid its fee whether or not the chips hold their value, while a bank that keeps its ticket carries that risk until it is repaid ^[9][11].

Brookfield could keep most of the $9 billion on its own books, leaving Korean lenders a small slice and postponing the test the Korea Herald describes ^[18]. The securities firms could underwrite large pieces and pass them to other investors ^[9]. Or the banks could hold real amounts, probably on terms tied to contracted demand. Another financial source set out that condition. "AIDCs with stable demand and secured tenants can attract capital, but financial firms are not funding every project simply because it is related to AI," the source said. "They are becoming increasingly selective." ^[15]

I'd expect the middle outcome, with the banks holding modest tickets. The reporting spells out the underwrite-and-sell-down route ^[9], and the talks are expected to run past their first 12-week window ^[6]. The view is wrong if the final package shows the five banks holding most of the Korean share without long-term tenant contracts behind it.

The 200 MW phase is a fifth of Naver's 1 GW goal ^[16]. At $50 million per megawatt, the full plan would cost about $50 billion ^[24]. Korea has little experience financing a single AI data center at that size, and power availability, GPU procurement and demand growth are all open questions ^[17].