[Edaily Reporter Shin Ha-yeon ] XIIlab Co., Ltd(189330)is raising 10 billion won in funding from sub-funds of the National Growth Fund to expand its artificial intelligence (AI) data center business. The company plans to broaden its business scope by combining the construction of infrastructure based on the latest graphics processing units (GPUs) with its proprietary operating software.

According to an electronic disclosure by the Financial Supervisory Service on the 6th, XIIlab Co., Ltd decided, following a board resolution, to issue its first series of bearer, unsecured, private placement convertible bonds (CBs) worth 10 billion won. The conversion price is 8,106 won per share, and the maturity is five years. The underwriting agreement is scheduled for the 10th, and payment is scheduled for the 16th.

Sub-funds of the National Growth Fund—managed by Korea Investment Value Asset Management, DB Asset Management, Suseong Asset Management, and Orion Asset Management—will subscribe to a total of 8 billion won of these convertible bonds. The remaining 2 billion won will be subscribed by Orion Asset Management’s KOSDAQ Venture Fund and other participants.

The National Growth Fund is a policy fund established to foster high-tech strategic industries such as AI, semiconductors, and biotechnology. XIIlab Co., Ltd., a company engaged in the AI infrastructure business, will secure the funds necessary to expand its data center-related operations through this investment.

Both the coupon rate and the guaranteed yield at maturity for the convertible bonds are 0% per annum. The bonds do not include a repricing clause that would lower the conversion price in the event of a decline in the stock price. XIIlab Co., Ltd has secured a call option covering up to 50% of the acquisition amount, while investors may exercise a put option to request early redemption starting 30 months after issuance. The company plans to use these issuance terms to reduce interest expense burdens and mitigate the potential dilution of shareholder value resulting from future conversions.

The company plans to use the raised funds as working capital for its AI data center (AIDC) construction projects. This is intended to respond to the expanding investment in AI infrastructure, including government-led national AI computing centers, regional AI data centers, and corporate GPU clusters.

Meanwhile, XIIlab Co., Ltd, as a NVIDIA Elite Partner, is expanding its business in building state-of-the-art GPU-based clusters. The company plans to proactively secure the funds necessary for equipment procurement and deployment projects in anticipation of future demand growth for next-generation GPUs, such as Vera Rubin.

In particular, the company plans to expand its business scope beyond simply building AI infrastructure to include operations and management. It will do this by deploying “AstraGo,” its proprietary GPU cluster management software, in data centers it has built, thereby providing both infrastructure construction and operational services.

AstraGo 2.1, released this year, supports AI inference operations and integrated data center management functions. XIIlab Co., Ltd’s strategy is to continuously enhance this solution and convert customers who commission GPU cluster construction into customers for operations and management services, thereby securing a recurring revenue stream.

While the AI data center business requires significant initial capital for infrastructure such as GPUs and servers, there is potential to secure recurring revenue from operation and management services after deployment. XIIlab Co., Ltd plans to use this funding to address the working capital burden associated with its deployment business while expanding its software-based operations business.

A XIIlab Co., Ltd official explained, “We are currently in a phase where domestic investment in AI computing infrastructure is expanding simultaneously across government-led national AI computing centers, regional AI data centers, and corporate GPU clusters,” adding, “We have secured working capital for our deployment business in advance to prepare for the growing demand for the latest GPUs, such as Verarubin.”

The representative further stated, “Our medium-term business strategy is to expand our deployment business to broaden the GPU management base for Astrago and convert this into recurring revenue in the operations and management sectors.”