SEOUL, June 20 (Reuters) - South Korea's SK Group will

invest around 7 trillion won ($5.11 billion) including $4

billion from Amazon Web Services, Amazon's ( AMZN ) cloud services

provider, to build a data centre in the southern city of Ulsan,

the Science Ministry said on Friday.

The AI data centre, which will be the country's largest,

will break ground in September and be fully operational with a

capacity of 100 megawatts by 2029, the ministry said in a

statement.

SK Group Chairman Chey Tae-won said he planned to expand the

data centre's capacity to one gigawatt in the future and make it

a global hub that handles domestic AI demand during a meeting

attended by President Lee Jae Myung and tech CEOs.

Artificial intelligence was crucial for South Korea's

growth, he said.

"It may set a good example that South Korea's high-tech

industry is possible not only in the metropolitan area but also

in the provinces," Lee said.

South Korea's AI-related stocks on Friday extended a rally

on policy optimism, with SK Hynix ( HXSCF ) rising more than

3%, Kakao surging 11%, and LG CNS

gaining 9%, leading the benchmark KOSPI above a key

milestone of 3,000 points for the first time in 3-1/2 years.

The official announcement follows media reports earlier this

month that SK Group and Amazon Web Services were building a data

centre in South Korea.

($1 = 1,368.7600 won)