LG Uplus is entering the prefabricated artificial intelligence (AI) data center business and has begun developing standard models. The strategy is aimed at shortening AI data center construction times to capture rapidly growing demand for AI infrastructure.

LG Uplus signed a memorandum of understanding with GS E&C, Xi C&A, Gansam Architects & Partners and D&O CM on Sept. 4 at its Pyeongchon Mega Center in Anyang, Gyeonggi Province, to establish a prefabricated modular data center (PMDC) alliance.

PMDC involves designing data center structures, power systems and cooling equipment to standardized specifications, manufacturing them in factories and transporting them to construction sites for assembly. Conventionally, power and cooling equipment and servers are installed sequentially after the building is constructed. PMDC allows site construction and production of major equipment to proceed simultaneously.

The biggest benefit is shorter construction time. Building a data center involves more than constructing the facility itself. Power equipment including substations and uninterruptible power supplies (UPS), cooling systems and piping must be installed and tested to ensure they operate properly together. PMDC moves much of this work to factories, where systems can be assembled and tested in advance, reducing on-site work largely to connecting modules.

Schneider Electric has said modular data centers can reduce deployment times by as much as 60%. Vertiv has said that carrying out factory fabrication and on-site construction simultaneously can save more than 40% of the time required for conventional data centers. LG Uplus, however, has not disclosed how much construction time its 100 MW model is expected to save.

Shorter construction periods can also allow data center operators to recover their investments sooner. If it takes three to four years to complete a data center after securing a customer contract, no revenue is generated during that period. Bringing operations forward by several months means rental and operating revenue can also begin that much sooner.

Another advantage is greater flexibility in adjusting investment to demand. Rather than building the entire capacity at once, operators can install only the modules initially required and add more as demand grows. With rapid generational changes in AI graphics processing units (GPUs) and related equipment, the approach can reduce the risk of excessive upfront investment. Factory integration and testing of power and cooling equipment can also reduce on-site rework and interoperability problems.

LG Uplus said in June that it would adopt the PMDC construction method at its Paju AI data center project. The latest agreement advances that plan to the development of actual standard models. The five companies have been reviewing since April both a new-build PMDC model for 100 MW hyperscale data centers and a retrofit model for converting existing buildings into AI data centers.

Under the agreement, the five companies will have clearly defined roles. LG Uplus will establish data center operating standards, technical requirements and business direction, and validate the models. GS E&C will handle construction and engineering, procurement and construction (EPC) for new-build models. Xi C&A will be responsible for converting existing buildings and optimizing power and cooling systems, Gansam Architects & Partners will handle standardized design, and D&O CM will oversee project management.

SK Telecom and KT are also pursuing modular AI data centers. SK Telecom signed a three-way memorandum of understanding with Supermicro and Schneider Electric at MWC26 in Barcelona in March to develop an integrated solution that prefabricates power, cooling and IT infrastructure in modules for assembly on site.

KT Cloud said in its AI strategy unveiled in July that modular data centers, which use standardized modules for power, cooling and server environments that are assembled on site, can shorten construction times and simplify capacity expansion. KT Group plans to invest 6 trillion won in AI infrastructure over the next five years and build 1 gigawatt (GW) of AI data center capacity.