Don't ignore the carbon risk baked into your AI supply chain
The article centres on IEEFA's warning that South Korea's energy mix is becoming a strategic vulnerability for industries that anchor global AI infrastructuresemiconductors and data centres.
Energy policy as a hidden AI dependency
- South Korea is a major hub for chip production and emerging AI infrastructure, yet its power system remains carbon-intensive and exposed to fuel price volatility.
- As carbon pricing and climate regulations tighten, operators may face rising costs, stranded-asset risk or stricter operating constraints.
- For global AI players relying on Korean fabs and data centres, this translates into systemic risk further up the stack.
Implications for investors and large buyers
- Investors watching AI and chip names will need to price in jurisdiction-level energy and climate risk, not just company-level ESG scores.
- Large cloud and AI customers may be pushed to prefer lower-carbon regions for long-term contractsor to insist on verifiable green power sourcing.
Action points for strategy teams
The signal here is that location choices for fabs, data centres and AI clusters are about carbon as much as connectivity. Boards and strategy teams should be asking: where are our critical AI dependencies concentrated, and how resilient are those regions to tightening climate policy and energy shocks?