Naver headquarters in Seongnam, Gyeonggi Province (Naver) Naver said Friday during its second-quarter earnings call that its artificial intelligence factory business with Nvidia was expected to begin generating revenue in the first half of 2027.Chief Executive Officer Choi Soo-yeon said the factory, which will provide large-scale computing capacity for AI, would launch with 55 megawatts of capacity in 2027. This is set to expand to 100 MW by the end of that year and 200 MW in 2028. The company ultimately aims to build out the infrastructure to the gigawatt scale.“This is not a one-off business opportunity, but an investment in a structurally growing market,” Choi said. “With the spread of generative AI, AI transformation across industries and the expansion of inference and AI agents, global demand for AI computing will continue to grow over the mid- to long term.”Choi also dismissed concerns that the emergence of cheaper and more efficient AI models could eventually curb computing demand.“There are concerns that lower-cost, more efficient models could lead to less computing usage,” she said. “But we believe that as the cost per unit of computing falls, the use of AI, inference and agents will expand, driving overall computing demand.”Building new AI infrastructure requires large amounts of power and land, along with equipment, skilled personnel and local support, making it difficult to bring new supply online quickly, Choi said.“Alongside our technological collaboration with Nvidia, Naver already has power and sites in place, capital partners and the capability to operate the full AI stack,” she said.Naver is targeting higher long-term profitability for the AI factory operator, Chief Financial Officer Kim Hee-cheol said.“Margins may start at a relatively low level in the early stage, but as the business matures, we expect them to reach double digits and, over the longer term, exceed 20 percent,” Kim said.Under the partnership, Nvidia will invest $1 billion directly in Naver, which will run the factory through a wholly owned subsidiary. That subsidiary will book the computing revenue, related costs, and the resulting profit. Naver plans to maintain high use rates by combining demand from external customers with its own need for computing resources.It also expects its partnership with Nvidia to help reduce risks in securing advanced AI chips amid intense competition for computing hardware.Naver plans to manage financing risks by signing customers to contracts of varying lengths, with longer-term agreements lasting five to six years.The AI infrastructure push comes as Naver continues to build on its core advertising and commerce businesses, although higher AI-related investment weighed on profitability in the latest quarter.The company posted record quarterly revenue of 3.39 trillion won ($2.39 billion) for the April-June period, up 16.2 percent from a year earlier, while operating profit edged down 0.2 percent to 520.3 billion won.Platform revenue rose 12.3 percent on-year to 1.9 trillion won, with advertising benefiting from AI-based improvements in ad placement and targeting. Naver said AI accounted for more than 60 percent of the growth in advertising revenue during the quarter.Service revenue jumped 31.3 percent from a year earlier, helped by continued growth in its commerce ecosystem.Revenue from the financial platform business increased 16 percent to 470.7 billion won. Payment volume through Naver Pay, the company’s mobile payment and digital wallet service, climbed 21 percent on-year to 25.2 trillion won in the second quarter.Naver’s global businesses generated 1.02 trillion won in revenue, up 24.4 percent from a year earlier. This was led by a 74.9 precent increase in consumer-to-consumer revenue as transaction volume and sales continued to grow across its global resale platforms, including Wallapop, Poshmark and Soda.Content revenue edged up 0.5 percent, while enterprise revenue rose 21.3 percent on stronger business-to-business sales related to AI and digital twin technologies.