SK Telecom Announces AI Pyramid Strategy to Become a Global AI Company

- SKT sets forth 'AI Pyramid Strategy' to accelerate innovation centered around three key areas: AI Infrastructure,AI Transformation (AIX) and AI Service.

AI Infrastructure,which consists of data center,AI semiconductor,and multi LLM,will serve as a technology platform that forms the basis of SKT as an AI company.

AI Transformation (AIX)of SKT's core business areas such as mobile,broadband and enterprise,as well as new business areas like mobility and healthcare will be pursued to reach a new level of productivity and customer experience.

In the area of AI Service,SKT announces the official launch of 'A.' and plans to build a globally competitive personal AI assistant service by leveraging its telco and AI assets.

- SKT will strengthen its own AI capabilities and collaborate with diverse global players to expand its presence in the global AI market.

- By 2028,SKT will triple the proportion of its AI-related investments and become a global AI company with revenue of KRW 25 trillion.

SEOUL,South Korea,Sept. 26,2023 -- SK Telecom (NYSE:SKM,"SKT") today announced its ambition to become a global AI company by strengthening its own AI competitiveness and cooperating with partners throughout the globe.

SKT's CEO Ryu Young-sang unveiled the new 'AI Pyramid Strategy,' which aims to innovate industry,society,and life centered around three key areas including AI Infrastructure,AI Transformation (AIX) and AI Service.

Under this new strategy,CEO Ryu said that the company expects the proportion of AI-related investment to approximately triple from 12% over the past five years (2019-2023) to 33% (2024-2028) over the next five years.

AI Infrastructure

Located at the bottom of the AI Pyramid,AI Infrastructure is an area where SKT's technological capabilities are concentrated. The area consists of AI data centers,AI semiconductors,and multiLLM.

With the growth of the AI market,the shortage of data centers is intensifying,and new social problems such as excessive use of power and rapid increase of CO2 emissions are emerging.

Against this backdrop,SKT plans to introduce energy-saving solutions like immersion cooling system and hydrogen fuel cells,and expand into the AI hosting business that generates higher margins by bundling these energy-saving solutions with Sapeon's neural processing unit (NPU) and SK Hynix's high bandwidth memory (HBM).

Based on differentiated energy solutions and AI hosting business,the company will expand its data center business to the global market.It explained that,by leveraging its data center operation capabilities and strong relationships with global cloud service providers,it will be able to successfully create new opportunities globally. It also plans to almost double its data center capacity by 2030.

Sapeon,an AI semiconductor company established by SKT,will launch a next-generation inference AI chip 'X330' at the end of this year.The X330 has approximately twice the computational performance and 1.3 times the power efficiency compared to the latest inference chips on the market. Sapeon will also cooperate with diverse companies to secure competitiveness in software platform.

SKTtoday announced that it has branded its AI technology as 'A.X' and named its large language model 'A.X LLM'.

The company is pursuing a multi-LLM strategy,under which it takes a two-track approach to secure diverse LLM lineup as well as an overall platform that encompasses the LLMs. It is advancing its own LLM based on high-quality data accumulated over decades. Simultaneously,SKT is collaborating with a diverse range of partners,including Anthropic,OpenAI,and Konan Technology,to develop tailored LLM and related technologies specifically for the telco industry.

First,in terms of strengthening its own capabilities,SKT plans to advance its LLMs into telco-specific LLMs by leveraging its abundant telecommunications-related data.

In addition,the company will continue to secure more sophisticated LLM technologies based on its supercomputer Titan,which ranked no. 47 on the Top 500 list of the world's most powerful supercomputers; high understanding of the Korean language trained with the world's largest Korean language data; intelligence platform where multi LLMs and AI technologies customized for diverse telco use cases can be utilized; and multimodal LLM technologies that support communication via not only text but also voice,video,and so on.

SKT invested USD 100 million in Anthropic last month,and is working together with Anthropic to develop LLM customized to telcos. The company is also cooperating with Open AI,which includes co-hosting of an AI hackathon in Korea. SKT also invested KRW 22.4 billion in Konan Technology last year,and the two companies are collaborating to enter into the enterprise market with LLMs customized to corporate customers.

AI Transformation (AIX)

In the area of AIX,which is located in the middle layer of the AI Pyramid,SKT will innovate its existing core business areas like mobile,broadband and enterprise with AI,while at the same time expanding into new business areas such as mobility,AI healthcare,media and advertising technology.

In the mobile business,the company stated that AI holds the power to significantly improve both profitability and customer experience. AI can not only be used to acquire/retain customers and provide better customer support via AI Contact Centers (AICC),but also be applied to the network infrastructure to enhance the efficiency in network deployment and operation. The company expects that,in the mid-to long-term,AI will help reduce 20 to 30% of costs compared to the current level.

SKT will also evolve SK Broadband's Btv service into AI TV to deliver a new level of convenience and value. For instance,'AI Curation' will identify the user and show personalized TV; and 'AI Home' will allow users to enjoy various media services by conversing with an AI agent.

In addition,by combining multi LLM with existing AI solutions like Vision AI,Language AI and Big Data AI,the company to expand its AICC business to financial institutions and data platform business to manufacturers. For its generative AI business,it will build customized services for public and financial institutions with strong needs for security and specialized services,while providing SaaS bundles to general corporate customers.

Furthermore,SKT will continue to pursue AI innovation and expand the overall AI ecosystem by growing its new business areas such as urban air mobility (UAM) and AI-based healthcare services like X Caliber. The company will also promote mergers and acquisitions in areas including media and advertising technology to create new business opportunities through AI transformation.

AI Service

SKT today announced the official launch of 'A.',the world's first Korean LLM service released in the beta version in 2022.

The company said that 'A.' will evolve into a personal AI assistant service by innovating customers' communication experience and fully assisting their everyday lives via seamless connection to a wide variety of AI services.

SKT plans to add an AI phone service,which enables new connections through communication innovation that can only be achieved by a telco. The AI phone will provide a variety of AI services and mobile experiences based on understanding and reasoning of call context.

For instance,it will recommend people to call based on call history and analyze the content exchanged during a call with AI to provide a call summary. At the same time,it connects users to necessary tasks,such as registering the schedule made during a call to the calendar or sharing addresses. More features such as real-time interpretation during calls will also be added going forward.

In terms of integrating AI into all aspects of daily life,SKT will start by offering an AI sleep management solution named 'A. sleep' and an AI music service this month.

'A. sleep' is developed by combining sleep management solution startup Asleep's sleep solution and SKT's AI. It evaluates sleep quality by analyzing user's sleep patterns. No separate device is needed. It helps users start their day in the best possible condition by determining the ideal wake-up time depending on their sleep status and quality.

The AI music service will not only allow users to edit their playlist by simply talking to A.,but also automatically recommend music that matches their tastes based on its generative customer prediction model.

Going forward,SKT plans to leverage its AI service-related experience and knowhow accumulated in the Korean market to develop a powerful personal AI assistant service that can attract global customers.

The company expects that its partnerships with diverse global players – including the Global Telco AI Alliance – will help accelerate its progress. SKT plans to expand its presence in the global AI service market by launching personal AI assistant services simultaneously in many countries across the world by working closely with telcos for localization and advancement of these services.

Two-track approach – self strengthening and cooperation – to accelerate growth to become a global AI company

SKT aims to leap into a global AI company that leads the AI ecosystem by strengthening its own competitiveness in areas including the personal AI assistant 'A.','A.X LLM',AI semiconductor and AI data centers,while working together with diverse partners throughout the globe.

"Destructive innovation triggered by generative AI is already creating new value in all areas of industry,and life. With our AI Pyramid Strategy,we will make accelerated moves to strengthen our own capabilities and cooperate with diverse partners,and expand our AI-related resource investments. Through these efforts,we aim to become a global AI company that benefits customers,increases industry productivity,and solves social problems with innovative technologies and services," said Ryu Young-sang,CEO of SKT.

About SK Telecom

SK Telecom has been leading the growth of the mobile industry since 1984. Now,it is taking customer experience to new heights by extending beyond connectivity. By placing AI at the core of its business,SK Telecom is rapidly transforming into an AI company. It is focusing on driving innovations in areas of telecommunications,media,AI,metaverse,cloud and connected intelligence to deliver greater value for both individuals and enterprises.

For more information,please visit our LinkedIn page www.linkedin.com/company/sk-telecom.