Recently, SK Telecom faced a setback in the competition for securing the ‘cloud-based GPU (GPUaaS)’ project, a company-wide effort for artificial intelligence (AI) new business. Some say this indicates that SK Telecom lost to KT, which partnered with Naver and Microsoft (MS), in terms of AI technology competitiveness.
◇ SKT, submitted the lowest bid and completed technical verification but was eliminated
On the 3rd, the industry reported that Naver Cloud and KT Cloud secured contracts in a GPUaaS project bid worth 200 billion won, initiated by 42Dot, a self-driving software subsidiary of Hyundai Motor Group. While the specific contract sizes were not disclosed, it is known that Naver secured over 100 billion won, and KT Cloud won contracts worth several hundred million won.
42Dot specializes in developing self-driving and mobility solutions. Since being acquired by Hyundai Motor in 2022, it has served as Hyundai's global software center. Hyundai is developing an integrated software platform related to self-driving cars through 42Dot. GPUaaS is an AI infrastructure business and is a key focus area for SK Telecom's AI new business. Through GPUaaS, users can use expensive high-performance graphics processing units (GPUs) in a subscription model and pay for what they use.
Although the scale of this bidding project is only in the 200 billion won range, Hyundai is expected to expand production of ‘software-defined vehicles (SDVs)’ including self-driving cars in the future, indicating that the GPUaaS market will continue to grow. This is anticipated due to the expected increase in demand for high-performance GPUs like the H100. SK Telecom, which is well aware of this situation, reportedly made a company-wide effort in this bidding project.
As of early this year, it was expected that SK Telecom would secure the contract as long as it completed technical verification (POC). According to industry sources, SK Telecom was reported to have submitted the lowest bid amount to secure the contract. However, Hyundai (42Dot) chose to partner with Naver and KT.
◇ SKT lost to Naver and KT in AI technology competitiveness
Why did Hyundai (42Dot) choose Naver and KT instead of SK Telecom, which offered a lower price?
In and out of the industry, there are discussions that indicate that SK Telecom has fallen behind Naver and KT in AI technology competitiveness. Naver emphasizes its own technological capabilities and is leading AI technology development in Korea. In 2021, it released the world's third-largest language model (LLM), and it is considered a top-tier player in the AI field. Recently, it received a request from Hyundai to develop an AI agent for vehicles.
KT is also recognized for having excellent AI technology capabilities. In 2023, it developed its own LLM called 'Mideum', and last year it pursued AI business cooperation through a partnership with MS. MS is considered one of the global cloud GPUaaS platform companies.
On the other hand, while SK Telecom has enhanced its GPUaaS competitiveness through collaboration with the American GPUaaS company Lambda, it reportedly lagged behind competitors in securing AI technology competitiveness.
An IT industry source noted, “Hyundai’s choice of Naver and KT was not just to find a cloud GPU provider for AI and data processing, but there seems to have been a consideration to select a strategic partner that could expand AI-related collaboration in the future.”
◇ After failing to secure the project, SKT noted “it’s hard to go against your own”
Some view that SK Telecom's expanding partnerships with foreign car companies that compete with Hyundai may have negatively impacted its chances to secure the contract. SK Telecom has partnered with Mercedes-Benz, BMW, and Volvo to equip vehicles with ‘Tmap’.
Additionally, there are analyses suggesting that special relationships have influenced contract awards. It is said that KT benefited due to its largest shareholder being Hyundai. There are also claims that the decision for Naver's award was influenced by the fact that Song Chang-hyun, CEO of 42Dot, has a background as the Chief Technology Officer (CTO) of Naver and CEO of Naver Labs.
These claims were further detailed through the comments of SK Telecom's head. Ryu Young-sang, president of SK Telecom, responded to a question about the failure to secure the 42Dot project during the company’s 2025 regular shareholders' meeting last month, stating, “There are indeed various difficult realities. As you know, our country’s B2B (business-to-business) environment tends to be protective. Despite our superior performance and pricing, there are aspects where we didn’t succeed.”