South Korea and the United States are discussing a potential investment of about $22.3 billion in a Texas gas-fired power project designed to supply electricity to the rapidly expanding network of artificial intelligence data centers, according to South Korean media reports.
The project would involve construction of a 6.3-gigawatt gas power plant in Encinal, Texas, and could become the first major U.S. investment by South Korea under a trade agreement reached by the two allies last year, South Korean outlet Edaily reported on Monday, citing unidentified government officials and politicians.
The reported investment would form part of Seoul’s broader commitment under the trade agreement to invest $350 billion in the United States in exchange for more favorable U.S. tariff treatment for South Korean exports.
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The $22.3 billion figure has not been confirmed by the South Korean government, however. South Korea’s Ministry of Trade, Industry and Energy said reports about the Texas project were inaccurate and that consultations with Washington were still underway. The ministry said it was difficult to confirm specific details while negotiations remained in progress and that the government would announce its plans after reaching an agreement with the United States and completing required procedures, including parliamentary approval.
The ministry also separately said no decision had been made to build a nuclear power plant in the United States.
The reported Texas project highlights a growing challenge facing the U.S. AI industry: access to electricity is becoming as important as access to chips and computing capacity.
AI data centers require extraordinary amounts of electricity as technology companies deploy large clusters of GPUs and other specialized computing equipment.
The rapid expansion of AI infrastructure has created a race among U.S. technology companies to secure reliable power, with developers now considering dedicated generation, long-term electricity contracts, and direct relationships with utilities.
A 6.3-gigawatt power facility would represent a substantial addition to the U.S. power system. The scale is considered huge because the plant would be intended to serve rising electricity demand associated with data centers and other large industrial users.
Texas has emerged as one of the largest destinations for new data-center investment because of its abundant land, relatively competitive energy market, and growing technology ecosystem. The state is also home to some of the world’s largest planned AI infrastructure projects.
The location, however, highlights the tension between the speed at which AI companies want to build computing capacity and the slower pace at which power infrastructure can be financed, permitted and constructed. That is increasingly forcing technology companies and their financial partners to look beyond traditional data-center development and toward the underlying energy infrastructure.
First Test of the $350 Billion Commitment
If confirmed, the Texas project would provide an early indication of how South Korea intends to deploy the $350 billion investment commitment contained in last year’s trade agreement. The commitment is broad and could include investments across manufacturing, energy, technology and other strategic industries.
For Washington, directing part of that capital toward U.S. electricity generation could support a central objective of the administration’s AI strategy: ensuring that the United States has enough power infrastructure to accommodate rapidly expanding computing demand. On the other hand, investing in U.S. energy infrastructure could provide a way for Seoul to meet its trade commitments while creating opportunities for Korean companies in an expanding American infrastructure market.
The investment could also deepen the integration of South Korean industrial groups into U.S. supply chains at a time when Washington is encouraging allies to put more capital into American manufacturing and strategic infrastructure.
The reported project would therefore have implications beyond the electricity market. It could become part of the broader economic relationship between the two countries, linking trade policy, energy security and the AI infrastructure buildout.
Other U.S. Projects Under Consideration
South Korea is also considering other potential investments in the United States, according to the reports, including a large-scale nuclear power plant and a liquefied natural gas project in Alaska.
Seoul’s Industry Ministry has stressed that no decision has been made on a U.S. nuclear project.
The range of projects under discussion underpins the changing nature of the U.S.-South Korea economic relationship. Energy has become increasingly important alongside semiconductors, automobiles, batteries and advanced manufacturing. South Korean companies already have substantial investments in the United States, particularly in electric vehicles, batteries and semiconductor manufacturing. Additional investment in power generation could strengthen the energy base supporting those industrial facilities as well as new data centers.
Natural gas is positioned to play an important role in the near-term U.S. response to rising electricity demand.
Gas-fired plants can generally be developed more quickly than large nuclear facilities and can provide dispatchable power when renewable generation is unavailable. That makes gas particularly attractive to data-center developers seeking reliable electricity around the clock.
The trade-off is that greater reliance on gas generation would increase exposure to fuel prices and raise questions about emissions at a time when technology companies are also facing pressure to reduce the carbon intensity of their data centers.
The Texas project, if ultimately approved, would therefore sit at the intersection of two competing requirements: the need for abundant, reliable electricity to power AI and the pressure to develop that capacity with lower environmental costs.
The South Korean government’s pushback against the reported figures indicates that the project remains subject to negotiation. The ministry’s statement also makes clear that any final commitment would require domestic approval procedures before Seoul could formally allocate public resources.
That leaves open questions over the project’s financing structure, including whether South Korea would fund the entire reported $22.3 billion or participate alongside U.S. and private-sector investors. A project of that scale could involve government-backed financing, state-linked companies, private investors, or a combination of Korean and American capital.
For now, the Texas gas plant remains a potential rather than finalized investment. But the discussions point to a broader shift in the economics of artificial intelligence. The next phase of the AI buildout will require far more than advanced chips and data-center buildings. It will require power plants, transmission infrastructure, natural gas supplies and other energy assets capable of supporting computing demand on an unprecedented scale.
If Seoul and Washington reach an agreement on the Texas project, it could become one of the clearest examples yet of trade policy being used to channel foreign capital into the physical infrastructure required to sustain America’s AI expansion.