South Korea chooses Texas for the first huge investment project as part of its pledge to the United States

South Korea is moving to transform its pledge to invest $350 billion in the United States into the first major project on Earth, through a gas power plant in the state of Texas worth about $22.3 billion, in a move that comes at a time when the Korean government is under American pressure to accelerate the implementation of its investment commitments.

Seoul chose the gas station in the city of Encinal, Texas, as the first specific project within the investment package it pledged to the United States in exchange for reducing customs duties on its imports of Korean goods to 15 percent. The station's capacity is expected to reach about 6.3 gigawatts, to provide electricity to data centers related to artificial intelligence and semiconductor facilities that are expanding in the state.

Korean estimates indicate that the project could generate revenues of about $45.4 billion over 20 years, exceeding the value of the original investment and its benefits, lawmakers in Seoul were told. These returns place the project within the framework of a commercial investment, and not just a political commitment within the US-Korea deal.

The move comes at a time when US President Donald Trump seeks to accelerate the implementation of Seoul's $350 billion pledge, which was part of the trade agreement between the two countries last year. Of the total package, $150 billion was allocated to cooperation in the field of shipbuilding, while the remaining $200 billion went to strategic projects in the energy, industry and technology sectors.

Recent developments reveal that the Texas station has become the practical starting point for the investment package, after weeks of negotiations regarding the nature of the projects, their financing mechanisms, and ownership of assets.

According to Reuters, the ministry later informed lawmakers that Seoul would provide financing for the project, with ownership initially being shared equally between the two parties. But American officials are seeking a long-term ownership structure in which the American side retains about 90 percent, compared to 10 percent for the Korean side, according to what Yonhap Agency reported, citing a lawmaker.

These details are still subject to negotiations, and the implementation of the package requires review by the US Government Investment Committee and the completion of consultations with US Secretary of Commerce Howard Lutnick. The South Korean presidency said on Wednesday that President Trump and his South Korean counterpart Lee Jae-myung welcomed, during their meeting in New York, the “significant progress” made in strategic investment projects.

The choice of the gas station in Texas reflects part of the shift in the needs of the American economy, as demand for electricity from data centers and chip manufacturing facilities increases, at a time when the United States is trying to expand the infrastructure necessary to support the artificial intelligence boom.

Seoul's plan is not limited to the Texas station. The negotiations also include the construction of up to eight large nuclear reactors in the United States, six of them using Westinghouse’s “AP1000” technology, and two using South Korea’s “APR1400” technology. If the last two reactors are implemented, they will be the first South Korean-designed reactors built in the United States.

Seoul is also negotiating to buy a stake ranging between 5 and 10 percent in Westinghouse, after it had previously sought a larger stake. The company's value is estimated based on valuations prior to its potential public offering, making the value of the Korean stake tied to the company's final valuation.

The gas project comes at the forefront of these investments, while South Korea's participation in the liquefied natural gas project in Alaska is still under discussion. The value of the Alaska project, which is supported by Trump, is about $50 billion, and includes a 1,300-kilometre pipeline to transport gas from the north of the state to Nikisky for export to Asian markets.

Choosing the Texas project puts the Korean government in front of a dual equation: responding to Washington's demand to accelerate investments, while at the same time preserving the commercial viability of the projects that will be financed with Korean funds.

The Chinese “Alibaba” group revealed a major plan to expand its network of data centers outside China, targeting markets in Europe, the Middle East and Asia, in a step that strengthens its ambitions to transform into a greater global player in cloud computing and artificial intelligence, amid the intensification of technological competition between Beijing and Washington.

The Hangzhou-based group said it will establish its first cloud regions in Turkey, Finland and the Netherlands, in addition to expanding its data center presence in Malaysia, Germany, the UAE, France and Hong Kong over the next 12 months.

The expansion gives Alibaba Cloud a broader infrastructure to serve customers outside the Chinese market, especially with the rapid rise in demand for the computing capabilities needed to train and operate artificial intelligence models.

Alibaba is considered one of the leading companies in the Chinese artificial intelligence race, while its “Coin” model has become among the most downloaded artificial intelligence models in the world.

Alibaba's plan reveals that competition in artificial intelligence no longer revolves only around producing the most advanced model, but rather has become a race to build the infrastructure that allows these models to operate globally. By combining domestic chips, international data centers and the Cowen model, the group seeks to reduce its dependence on foreign technology, while at the same time expanding its ability to compete outside China.