Korea's AI industry poised to leap under new president's goal to join world's top 3
President Lee Jae-myung presides over a Cabinet meeting at the presidential office in Yongsan District, Seoul, Tuesday. Yonhap
Citing an “unprecedented era of ultra-technological civilization,” President Lee Jae-myung has pledged major investments and support for advanced technology industries in a bid to position Korea as a global leader.
During his campaign, he demonstrated a strong commitment to further advancing Korea's AI industry, which he believes will help make the country one of the world’s top three AI powerhouses.
True to his promise, just two days into his presidency, his administration announced the creation of a dedicated executive office for AI future strategy within the presidential office, a move signaling his intention to take direct control of shaping AI governance and policy.
“The office for AI future strategy will oversee strategies for growth and future-oriented initiatives, while also comprehensively focusing on fostering the AI industry, advancing cutting-edge technologies and addressing challenges related to population and climate crises,” presidential chief of staff Kang Hoon-sik said during a briefing last week.
Korea’s stagnation in global AI race
According to the Critical and Emerging Technologies Index report by Harvard Kennedy School’s Belfer Center, released earlier this month, Korea ranked fifth in overall sectors on global advanced technologies assessment, trailing behind the United States, China, Europe and Japan.
However, in AI specifically, Korea ranked ninth behind India and Canada and barely leading Japan. Despite scoring relatively well in data infrastructure, the country fared poorly in presence of global AI firms and algorithm development.
AI performance and efficacy data by country / Captured from the Critical and Emerging Technologies Index
“The current race for AI dominance, driven by both states and private firms, is about more than just computing power,” the report said.
“The U.S. is ahead in AI, with China and Europe roughly tied in the second tier … Meanwhile, mid-tier and lower-ranked countries consistently struggle with minimal research and development, creating persistent bottlenecks to innovation and deployment.”
In the past couple of years, Korea has been struggling to forge progress in AI development, seeing a drop in private investments.
Stanford University’s annual AI Index Report showed that Korea’s global private investment in AI fell to $1.33 billion last year compared to the previous year’s $1.39 billion, placing the country 11th worldwide. It noted a worsening outflow of AI experts, with net AI migration rising to 1.51 per 10,000 LinkedIn users, up from 0.41 the previous year.
Lee’s AI policy
Amid the stagnation, Lee is pushing for an ambitious policy road map with large-scale public investment, AI infrastructure expansion and innovation across its ecosystem.
During the campaign, he pledged 100 trillion won ($73.2 billion) worth of investment in AI, creating a national fund jointly pooled from public and private sectors to be used toward a comprehensive AI transformation (AX). The fund is intended to encourage participation of the private sector and help mitigate the ongoing drop in private investments.
Then-presidential candidate Lee Jae-myung, left, shakes hand with FuriosaAI CEO Baek Joon-ho at the company's office in Seoul, April 14. Yonhap
Lee’s initiatives for AX also include building AI infrastructure, such as an AI highway with national AI data centers and nurturing innovation clusters, as well as securing graphics processing unit (GPU) capacity by acquiring over 50,000 high-performance GPUs to help create AI data clusters.
He also vowed for an "AI for All" project, which will allow the fair chance of access to AI tools like ChatGPT for the public, and to offer regulatory sandboxes for AI convergence across industries. For the project, the administration plans to develop a national open-sourced large language model for both citizens and businesses.
Additionally, the initiatives include enhancing AI education and establishing local centers to promote digital literacy and to cultivate future AI experts nationwide.
Industry impacts: from health care to finance
Market analysts predict wide-ranging impacts across sectors, including health care, finance, education, software and manufacturing, once Lee’s policies for AX are in full swing.
Hana Securities noted that if government-led R&D investment and bio-specialized funding expand in health care, AI-assisted diagnostics and digital health solutions will accelerate their development, enabling AI-powered clinical and imaging analysis tools to reach the commercial market sooner.
“By expanding high-performance computing infrastructure such as GPUs and neural processing units, which are essential for AI development and data centers, the commercialization of AI-based solutions will be expedited,” the company said.
“The increased access of public data to the private sector and enhanced data connection between hospitals and institutions will promote medical AI research and the development of new products.”
Students study with AI-powered digital textbooks during a demonstration class by the Ministry of Education at an elementary school in Daegu, April 10. Yonhap
In finance, Lee's pledges to regulate digital assets will lead to a more integrated approach to financial innovation. Whereas the education sector will see AI-driven structural changes through AI-powered digital textbooks, mandatory AI courses and personalized learning.
The AI software industry, which already has been expanding rapidly across sectors, is expected to face a boom in mergers and acquisitions as companies seek to internalize AI technologies.
The AI industry has responded positively to Lee’s ambitious agenda. OpenAI Chief Strategy Officer Jason Kwon expressed his commitment to helping the administration with the initiatives, saying “Looking forward to supporting however we can.”
However, some experts are cautious about whether the vision can be fully exercised. Citizens' Coalition for Scientific Society, a science-tech NGO which consists of 265 scientists, expressed concerns during the presidential campaign.
“While President Lee’s AI strategy expands the ecosystem through public-centered diffusion, there’s a lack of specific measures regarding how to connect the process of technology transfer, demonstration and commercialization. Policy must address this gap,” the group said.
Whether Lee’s administration can overcome structural hurdles and mobilize public-private momentum remains to be seen. However, the stakes for Korea’s AI future have never been higher.