Shinsegae Group and Reflection AI are teaming up to build a 250MW data center in South Korea, which they claim will be the country’s largest sovereign AI factory.

Korean conglomerate Shinsegae and AI lab Reflection have signed a Memorandum of Understanding (MoU) laying out their intention to set up a joint venture (JV) to build the data center.

The MoU was signed in San Francisco earlier this week at a ceremony attended by US Commerce Secretary Howard Lutnick.

Under the JV agreement, Shinsegae will secure a plot of land and build the data center, for which Reflection AI will be responsible for the design and operation of the equipment inside.

The project is expected to cost at least 10 trillion won ($6.8bn). Further details haven't been shared.

“The Reflection and Shinsegae Group AI factory will equip the Korean government and enterprises with fully sovereign frontier capabilities built and operated on home soil, setting a new standard in technological self-sufficiency,” a statement from the companies said.

Shinsegae Group operates department stores, as well as e-commerce, hospitality, and real estate businesses, and is apparently keen to become South Korea’s answer to Amazon and the other hyperscalers.

"The data center that we are building in partnership with Reflection AI will not only be a growth opportunity for Shinsegae, but also a pivot point for the Korean AI ecosystem," said Yongjin Chun, chairman of Shinsegae Group.

Reflection AI is developing open AI models akin to China’s DeepSeek, rather than the proprietary systems owned by the likes of OpenAI and Anthropic. It was set up by Misha Laskin and Ioannis Antonoglou, two former Google DeepMind engineers. It is backed by Nvidia and raised $2 billion in October 2025. Earlier this month, it was reported to be seeking further funding in a round that would value the business at $20bn.

In November, it announced a deal to use GMI Cloud’s US-based infrastructure to train and run its models.

It is also one of a number of companies that are part of an Nvidia-founded open AI coalition, Nemotron, which was launched at the GPU giant’s GTC event in California earlier this week.