Domestic PEFs hesitant to invest in AI data centers

Domestic private equity funds (PEFs) are hesitant to invest in artificial intelligence (AI) data centers due to regulatory risks.

The 2021 amendment to the Capital Markets Act allowed PEFs to invest in real assets, but the Enforcement Decree of the Fair Trade Act has not been revised accordingly.

As a result, foreign PEFs are taking the lead in investing in AI data centers in Korea, with KKR investing $38 billion in SK Horizon and Naver partnering with Brookfield to raise $100 billion in AI data center funds.