SK Hynix, the second-largest chipmaker in South Korea following Samsung, has announced plans to invest $74.6 billion over the next three years into the development of memory chip technologies with a focus on artificial intelligence (AI). The parent company, SK Group, aims to secure an additional $57.8 billion by 2026 to support its AI initiatives, according to a report by Reuters.

Artificial Intelligence Development

SK Group has faced significant financial setbacks through its subsidiary, Hyinx, and its vehicle battery division. The collective investments, if attained, will amount to nearly $133 billion. This exceeds the market capitalization of SK Hynix alone, currently standing at around $118 billion.

The company perceives these substantial investments in AI technologies as a strategic move to address earlier losses and enhance its financial outlook. The shift towards AI not only signifies a focus on innovation but also a means to streamline operations by rationalizing the numerous subsidiaries within SK Group.

Competitive Landscape in AI

The realm of artificial intelligence is fiercely competitive among enterprise players like Google, Microsoft, and Nvidia. While major tech giants battle for dominance, the semiconductor market presents its own challenges and opportunities.

Emerging technology firms are increasingly entering the AI domain, intensifying the demand for advanced chips capable of powering AI systems. SK Group anticipates that its investment strategy will elevate its profits from an estimated $16 billion in 2024 to nearly $30 billion by the close of 2025.

This strategic focus underscores SK Group's determination to fortify its position in the rapidly evolving AI landscape amidst stiff competition.