In September 2023, SK Telecom revealed the ‘AI Pyramid Strategy’ as a key to leap as a ‘Global AI Company.’ AI Pyramid is a phased strategy that groups SKT’s two organizational models in the shape of a pyramid: ‘Reinforcement,’ which refers to advancement of the company’s AI technology and development of an AI service to form intimate relationships with their customers, and ‘Cooperation’ centered on AI alliance. 2024 marks the 40th anniversary of SKT’s foundation, in which the company intends to execute the AI Pyramid Strategy in earnest to build a fruitful year as a ‘Global AI Company.’

SKT’s Vision

SK Telecom aims to take a leap as a ‘Global AI Company’ by reinforcing their AI competitiveness and cooperating with AI leaders at home and abroad. To this end, the company has grafted AI into their core business based on the AI infrastructure, and is promoting the AI Pyramid Strategy, which targets at the global market through an AI service. The AI Pyramid is subdivided into three phases: AI Infra, AIX(AI Transformation), and AI Service.

‘AI Infra,’ situated at the bottom layer of the AI Pyramid, is the domain in which SKT’s cutting-edge technologies are assembled, including Telco LLM(Large Language Model), AI DC(Data Center), AI semiconductor, and AI wire-wireless Infrastructure, etc. In the ‘AIX’ domain, the company plans to innovate customer experience by grafting AI into their core businesses such as mobile, broadband, and enterprise, and at the same time, expand their AI business area to AI healthcare. At the top layer of the AI Pyramid lies ‘AI Service,’ through which SKT is aiming at both the domestic and global market with services such as personal AI assistant A.(A Dot), and Global PPA(Personal AI Assistant).

① AI Infra
AI Data Center is the core growth industry of the AI Infra. Along with the spread of AI, the demand for data centers is on the rise. As a response, SKT plans to expand their domestic data centers to twice the current size by 2030. Also at a developmental stage is the ‘AI DC Global Package,’ which gathers the competitiveness of the SK Family Group in one place. The company will use Sapeon’s AI semiconductor to boost up the performance of their data centers, while examining the commercialization of a cooling solution based on liquid immersion cooling* with SK Enmove. Furthermore, AI has been applied to DCIM** to heighten the efficiency of their management.
* A next-generation heat-management system that cools down the servers in a special cooling-oil which does not conduct electricity
** Data Center Infrastructure Management

AI Chipset is seeking business expansion centered on the next-generation AI inference Chip X330. AI will also be grafted into the wire-wireless infrastructure. SKT aims to innovate the productivity and stability of AI assisted infra by applying AI to the existing wire and wireless networks. In the long term, the wire-wireless infra will evolve as an AI infra.

SKT has also developed an exclusive Large Language Model, A.X LLM, and is carrying forward the collaboration with domestic and overseas AI Players such as Anthropic, Open AI, and Konan Technology, etc. Simultaneously, the company is materializing the joint development and collaboration of Telco-specialized LLM by establishing the Global Telco AI Alliance(GTAA) with global Telco groups.

At MWC24 held in February 2024, SKT announced the establishment of a joint venture with leading Telco companies in Europe, Middle East, and Asia, including Deutsche Telecom, e& Group, Singtel Group, and Softbank, etc. Together, the joint venture will develop an AI technology and carry out a collaborative business. In July the previous year, SKT, along with the executives of Deutsche Telecom, e& Group, and Singtel Group, had officially launched a global Telco AI alliance, known as ‘Global Telco Alliance(GTAA),’ and signed a contract for business collaboration of AI-related technology.

Through this joint venture, the five Telco players will begin development of ‘Telco LLM(Telecom-specialized Large Language Model)’ in earnest. Starting with 5 languages; Korean, English, Japanese, German, and Arabic, the service will expand into a multi-language LLM that supports diverse languages used around the world. The establishment of this joint venture celebrates the birth of the first large-scale global Telco AI alliance, adding up to 1.3 billion users altogether.

② AIX
SKT is boosting up the efficiency by grafting AI into their core businesses, such as mobile, broadband, and enterprise, and is excavating new growth engines. Through application of Telco LLM, they are promoting evolution of their AI customer center and heightening the network infra management efficiency based on AI. Last year, the company launched ‘AI B tv’ on Broadband B tv, which is a hyper-personalization service which has upgraded the customization function based on SKT’s AI technology. In addition to this, SKT opened a customer-specialized innovative AI platform, ‘Enterprise AI Market,’ based on the company’s differentiated AI infra asset. The platform supports customers with establishing an optimal solution using various LLM. Finally, the enterprise domain will put its focus on 6 areas; Generative AI, AI Robot, AI Vision, AI Contact Center(AICC), AI Marketing, and AI Data, and will keep expanding its business areas using AI.

The UAM business exhibited an actual UAM airframe of America’s Joby Aviation at this year’s ‘K-UAM Grand Challenge’ demonstration project, for the first time in Korea. By doing so, SKT has occupied leadership in the domestic market, and will propel joint advancement into the global market.

In the AI Healthcare business, the AI-based veterinary imaging-diagnosis support service ‘X Caliber’ is accelerating its advancement into the global market, adding more nations on the list. Last year, SKT signed a partnership with major medical device distributors and insurance companies in Japan, Australia, and Singapore to supply their products to local veterinarians. Following this, in January 2023, the company signed a contract with America’s veterinary medical imaging company, Vetology Innovations, and is now pushing forward their advancement into the American market, namely the world’s largest pet market.

③ AI Service
Since its official launch in September last year, SKT’s Personal AI Assistant, ‘A.(A Dot)’ has been quickly attracting more users, as iPhone’s call recording and real-time call translation service brings sensation into the market. ‘A.’ will continue to add killer contents that use AI to innovate customer experience in daily life, reinforcing its position as a leading AI agent. At the same time, SKT plans to develop global PAA, targeting their service at the global market.

Performance

SKT achieved uniform growth in their 3 major business domains under the ‘AI Pyramid Strategy’: ▲AI Infrastructure ▲AIX ▲AI Service, recording consolidated sales of KRW 17.6 trillion, and business profit of KRW 1.75 trillion in 2023. This is a year-on-year increase of 1.8%, 8.8% respectively, and a net gain of KRW 1.15 trillion.

On a separate basis, sales grew to KRW 12.6 trillion, business profit to KRW 1.5 trillion, and net gain to KRW 1.6 trillion. This year, SKT’s AI businesses are prospected to achieve a full-scale rise in sales, based on the overpowering AI infrastructure and technological competitiveness the company has accumulated.

Business Domains and Associate Companies

History