NAVER has decided to provide a debt guarantee of 18.74 trillion won (18 trillion 740 billion won) to its affiliate Naver Cloud for its global AI factory business. Along with this, the company disclosed an internal transaction in which it will receive approximately 670.7 billion won (670.7 billion won) in guarantee fees, and it also specified the method for building the computing infrastructure for the AI factory project being pursued jointly with NVIDIA.

64.73% of Equity… Guarantee Valid Until End of 2034

According to NAVER's disclosure on the 27th regarding its 'Decision on Debt Guarantee for Another Party,' the guaranteed amount of 18 trillion 740 billion won equals 64.73% of its equity capital. The debtor is Naver Cloud, and the creditors are Green Holding L.P. and Asset Co. (provisional name). The guarantee period runs from October 27, 2026 to December 31, 2034, and the total balance of debt guarantees including this one is 19 trillion 4904 billion 7208 million 8000 won.

This debt guarantee covers payment obligations arising from ▲the investment and operation agreement concluded between NAVER and Naver Cloud and Green Holding L.P., and ▲the GPUaaS supply contract and GPU consigned operation contract that Naver Cloud plans to conclude with Asset Co. (provisional name).

Brookfield Investment Entity to Build Infrastructure, Naver Cloud to Use It

Through a corrective disclosure on its future business and management plans filed the same day, NAVER stated that it plans to proceed with the project in a manner whereby Asset Co. (provisional name), established by an investment-purpose company of the Brookfield AI Infrastructure Fund, will build the $9 billion (9 billion dollar) computing service infrastructure required for the AI factory, and Naver Cloud will use it.

Asset Co. (provisional name) is a corporation to be established in Korea with 100% investment from a Brookfield investment-purpose company, and NAVER explained that the entity is expected to be included as its subsidiary and affiliate under Korean International Financial Reporting Standards (K-IFRS). Naver Cloud plans to receive GPUaaS, a GPU-based computing resource service, from this entity and provide AI data center services to its customers.

The guaranteed amount of 18 trillion 740 billion won is the nominal total of supply payments expected to be made through the end of 2034, the maximum contract period, assuming that the $9 billion investment limit under the GPUaaS supply contract is fully executed. NAVER stated that as of the disclosure date, there are no confirmed obligations to pay supply consideration or other payments, and the actual amounts related to the guarantee may vary depending on GPU investment schedules, interest rate and exchange rate fluctuations, and cost settlements.

670.725 Billion Won Fee Transaction via Private Contract

In connection with this, NAVER also disclosed a guarantee fee transaction worth 670.725 billion won (670.7 billion 250 million won) with Naver Cloud. The transaction period runs from October 27, 2026 to December 31, 2034, and the contract was concluded through a private contract. The fee was calculated by assuming that the $9 billion investment limit under the GPUaaS supply contract is fully executed according to the individual investment schedule, and applying an annual guarantee fee rate of 0.4375% to the transaction amounts expected to arise during the guarantee period. The actual amount received may change depending on the supply commencement schedule, the scope of the guarantee, and tax review results.

GW-Scale Infrastructure with NVIDIA… First Hub to Be 'GAK Sejong'

Meanwhile, NAVER is pursuing a project to jointly build a global AI factory with NVIDIA. NAVER leads the acquisition of data center sites and their construction and operation, while NVIDIA participates as the GPU supplier. The infrastructure construction plan sets provisional targets of 55MW in the first half of 2027, a cumulative 100MW by the end of 2027, and a cumulative 200MW in 2028, ultimately pursuing gigawatt (GW)-scale infrastructure. The first project hub will be the hyperscale data center 'GAK Sejong,' with plans to expand in stages beyond Asia-Pacific to Europe and the Middle East.

NVIDIA is also set to participate in a third-party allotment capital increase of approximately $1 billion (1 billion dollars) targeting NAVER common stock. The two companies will also pursue technological cooperation through the adoption of NVIDIA's next-generation infrastructure platform, 'DSX.'

Business Execution Risks

NAVER stated that this AI factory project will be pursued in stages, and the investment scale and schedule for each stage may change depending on market conditions and the results of negotiations. It also cited potential obstacles in the project execution process, including delays in securing data center sites, permits and approvals, and power infrastructure, as well as fluctuations in the supply and demand of global AI infrastructure.