South Korea accelerates AI development amid global tech rivalry

In February 2023, South Korea experienced a significant shift in its approach to artificial intelligence following the shocking release of DeepSeek-R1 by a Chinese start-up. This generative AI model unexpectedly matched the performance of leading US models while using less processing power, sparking concern among South Korean officials. Recognizing the implications of this technological advancement, South Korea's government began actively supporting domestic AI initiatives to enhance its competitive edge. Sam Altman, CEO of OpenAI, visited Seoul on February 4 for crucial meetings with major local tech leaders, including Lee Jae-yong of Samsung and Chung Shina of Kakao, to discuss partnerships and growth opportunities. The urgency for South Korea to cultivate homegrown AI technologies has intensified due to past struggles with capital constraints and a limited talent pool in the tech sector. Despite the previous attempts to develop local models like HyperCLOVA X, designed to reflect Korean culture and values, these initiatives have yet to rival prominent US AI systems. Altman’s visit and the discussions around Kakao's collaboration with OpenAI to develop a new AI agent emphasize the importance of adapting to rapid AI advancements in the global arena. In light of the ongoing digital tensions between the United States and China, South Korea’s drive to establish its own AI framework is not only about technological growth but also about maintaining its geopolitical relevance. The South Korean government is pushing for a national strategy that coordinates resources between industry and academia to overcome existing challenges. The introduction of legislation, such as the AI Basic Act passed by the National Assembly in December 2024, signals a foundational step toward comprehensive governance and support for AI technology. As the AI landscape evolves, South Korean companies are keen to leverage the open-source capabilities showcased by DeepSeek, allowing startups to innovate even with limited resources. This means that with strategic investments and proper resource allocation, South Korean firms could potentially accelerate their AI developments significantly. The new wave of domestic efforts is set against a backdrop of global competition and the need to ensure that AI technologies align with South Korean cultural values, paving the way for self-reliant advancements in the sector.