Shinsegae Group is making artificial intelligence (AI) a new pillar of future growth and pursuing synergies with its existing retail business. It plans to work with U.S. company Reflection AI to build South Korea's largest AI data centre and to become an AI cloud provider that contributes to strengthening national AI competitiveness.

Shinsegae Group and Reflection AI signed a memorandum of understanding (MOU) for a strategic partnership to build a "Korean sovereign AI factory" in San Francisco on March 16. The partnership is a case of technology cooperation through the "AI export programme" launched by the U.S. government last year.

Shinsegae Group Chairman Chung Yong-jin (정용진) and Reflection AI Chief Executive Misha Laskin (미샤 라스킨) attended the signing ceremony.

Chung said, "It is an honour to be able to contribute to realising South Korea's AI vision." He added, "I hope the plan we announced today becomes a meaningful blueprint for Korea and many countries that believe AI should develop independently."

Ahead of the MOU event, Laskin said Reflection AI recently opened an office in San Francisco and that the building housing the office was where the United States first made an international phone call to another country across the Pacific more than 100 years ago. He said he hopes the AI collaboration with Shinsegae Group announced on the day becomes a major symbolic event for an AI connection linking Korea and the United States, just as that first call connected the United States and another country.

U.S. Commerce Secretary Howard Lutnick also attended and said he would actively support the project for its successful progress.

Shinsegae and Reflection AI plan to build an AI data centre with a power capacity of 250 megawatts (MW), the largest in the country. The project will proceed in stages, gradually increasing power capacity.

The company explained that securing GPUs, a core facility for an AI data centre, has made it possible to design the country's largest AI data centre. Reflection AI will receive supplies of graphics processing units (GPUs) for the data centre from Nvidia.

Reflection AI drew $2 billion in investment from Nvidia and others after being valued at $8 billion in October last year. It is an open-weight AI model developer founded in February 2024 by a group of AI experts including current CEO Laskin, a key developer at Google DeepMind, and current Chief Technology Officer Ioannis Antonoglou, one of the core developers of AlphaGo.

Shinsegae explained that open-weight AI models provide infrastructure that allows users to change model structures for their purposes and make it easier to secure data sovereignty that enables independent information management.

The two companies plan to build a "full-stack AI factory" that can provide cloud services and tailored AI solutions based on a large data centre. Shinsegae said it aims to grow into an AI cloud provider with technological capabilities and data security capacity.

At the group level, it will make AI a new pillar of future growth. Shinsegae said it plans to identify AI incorporating its insights and actively pursue synergies with its existing retail business.

It will develop a full-stack AI to apply not only to AI commerce but across its retail business. It will promote operational efficiency, including improved inventory efficiency, improve profitability and seek to build detailed and fast delivery logistics.

Through this, it plans to usher in an "E-Mart 2.0" era optimised for the future retail industry and to lead the development of South Korea's retail market.

Shinsegae and Reflection AI plan to establish a joint venture within this year. Shinsegae plans to consult closely with relevant agencies and local governments to proceed with the project after setting up the joint venture.

Chung said, "AI will comprehensively transform all areas such as future industry, the economy and life, and future industries without AI will not be able to survive." He added, "The data centre construction collaboration project with Reflection AI will become the foundation for Shinsegae's future growth and will also contribute to advancing the AI ecosystem across the domestic industry."