U.S. AI startup ReflectionAI, which has received investment from Nvidia, will work with Shinsegae Group to build a large data centre in South Korea, the Wall Street Journal (WSJ) reported on Sunday.

The project will be worth billions of dollars and is part of a U.S. technology export strategy pursued by the Trump administration, the WSJ reported.

The data centre will have 250 megawatts of power capacity, equivalent to the amount of electricity used by a small U.S. city.

ReflectionAI will be responsible for chips, AI models and engineering, while Shinsegae will handle financing, real estate and permits. ReflectionAI also plans to develop AI models tailored to the Korean language and Korean culture.

Founded two years ago by former Google DeepMind employees, ReflectionAI has been developing open-source AI models in an area where Chinese companies are strong.

Misha Laskin (미샤 라스킨), ReflectionAI's chief executive, said, "Open models are a Trojan horse that brings in infrastructure like chips, software and applications," and added, "We are working to prevent other countries from becoming dependent on Chinese infrastructure."

Chung Yong-jin (정용진), chairman of Shinsegae, said the data centre would be a growth opportunity for Shinsegae and a turning point for South Korea's AI ecosystem.

According to the Financial Times (FT), ReflectionAI is in talks to raise funds at a target valuation of $20 billion from backers including Nvidia and 1789 Capital, which has Donald Trump Jr. as a partner.