Daegu mayor demands explanation from SK Group over scrapped AI data center project

Daegu Mayor Choo Kyung-ho on Wednesday formally called for SK Group to provide an official position and alternatives after the company halted plans to build an AI data center in the city.

Choo characterized the move as a unilateral withdrawal of investment by SK Group, expressed regret and protest, and demanded the company clearly explain to Daegu residents why the project was suspended and what steps it plans to take going forward.

SK Group signed a memorandum of understanding with Daegu in 2023 to build a high-performance, energy-efficient AI data center with a power capacity of 40 megawatts in Suseong Alpha City, targeting completion in 2028.

From the first half of 2025, however, the company effectively abandoned the project, citing changes in the data center investment environment and broader business conditions, and notified Daegu of the suspension earlier this year.

Choo acknowledged that SK Group's breach of the MOU predated his inauguration as mayor, but said he conveyed his regret and protest on behalf of the city and its residents.

"I call on SK to clearly explain to the people of Daegu what its position is on this unilateral withdrawal of investment and what alternatives it intends to offer," Choo said. "We will wait for a sincere response from SK."