AIDC Special Act Passes National Assembly... Introduction of Approval Timeout System (Comprehensive)

Streamlined Approval Procedures and Eased Power Regulations Outside the Seoul Metropolitan Area
Improved Standards for Parking Lot and Artwork Installations
To Take Effect in February Next Year After a Nine-Month Grace Period

Status of Major Domestic Corporate Data Centers

"Due to regulations related to artificial intelligence data center (AIDC) buildings, we were required to install parking lots that were unnecessarily large or display artworks in spaces with few users. However, with the passage of the AIDC Special Act in the National Assembly, this burden has been eased."

On May 8, major domestic conglomerates engaged in AIDC projects expressed optimism that the establishment of the “Special Act on the Promotion of the Artificial Intelligence Data Center Industry (AIDC Special Act)”—which has passed the plenary session of the National Assembly—will accelerate the development of AI infrastructure. This is because the complicated permit and approval procedures will be greatly simplified, and the facility installation standards, which the industry has long criticized, will be eased, thereby reducing unnecessary regulations.

However, there are still voices from the field calling for practical solutions to bottlenecks in power supply and in securing local acceptance for data centers.

An industry official operating a data center outside the Seoul metropolitan area said, “For domestic companies to compete on equal footing with global big tech firms, not only technological capabilities but also the supporting infrastructure environment are essential. This legislation is expected to resolve institutional bottlenecks that domestic companies have faced in building and operating AI infrastructure.”

Another industry official emphasized, “Since reliable power supply is the core of promoting AIDC projects, a wider range of policy alternatives needs to be prepared in this area going forward.”

South Korea’s National Assembly has been discussing the need to enact a special law to accelerate the development of AIDC—the core infrastructure for rising as a top-three global AI power—and to attract investment. The AIDC Special Act was first proposed in the National Assembly in May last year. The 22nd National Assembly consolidated six bills through a bipartisan agreement and passed the Act through the Science, ICT, Broadcasting, and Communications Committee and the Legislation and Judiciary Committee, before it was approved in the plenary session the previous day.

Partial Exemption from Power System Impact Assessment

First, the permit and approval procedures—which have been a major burden on businesses—will be simplified. The industry has pointed out that the responsibility for permits required to build AIDCs had been scattered across multiple agencies, and the lengthy approval periods have delayed AIDC investments. To address this, AIDC operators will now be able to process a range of permits through a single window (the Ministry of Science and ICT), following deliberation and resolution by the National AI Strategy Committee.

In addition, a “timeout system” will be introduced, under which permits will be considered granted if not processed within a certain period. This will shorten both the procedures and timelines for permits related to AIDCs. Furthermore, the Act includes provisions exempting newly built or expanded AIDCs below a certain size, or existing data centers being converted into AIDCs, from the requirement to undergo a power system impact assessment.

Facility installation standards will also be relaxed. Although AIDCs are buildings centered around servers, they had been required to comply with the same installation standards for elevators, parking lots, and artworks (based on building area) that apply to buildings primarily used by people. This needed to be improved.

However, the special provision for power purchase agreements (PPA)—a key issue in the legislative discussions—was partially scaled back. The PPA provision, which allows non-capital region AIDCs to purchase electricity directly from power generation companies, will apply only to the renewable energy sector and not to liquefied natural gas (LNG), following discussions with the Ministry of Climate and Environment. The AIDC Special Act will come into effect from February next year, after being approved by the Cabinet and promulgated, with a nine-month grace period.

Vice Prime Minister and Minister of Science and ICT, Bae Kyunghoon, said, “A key foundation has been established to accelerate the development of the AI superhighway, including expanded investments by companies in AIDCs and attracting large-scale foreign investments. We will also actively cooperate with the Ministry of Climate to ensure a stable power supply for AIDCs.”

This content was produced with the assistance of AI translation services.