National AI model project faces backlash over ‘hasty wild card entry’

Attendees visit Naver Cloud's booth during a presentation for the national artificial intelligence foundation model project at Coex in Seoul, Dec. 30, 2025. Yonhap

Korea’s government project to build a homegrown artificial intelligence (AI) foundation model is facing mounting criticism after the government tore up its own competition rule, abruptly deciding to allow "a wild card entry" for a consortium that had been eliminated in earlier selection rounds or had not participated in the process in the first place.

The Ministry of Science and ICT on Thursday announced that three consortia — led by LG AI Research, SK Telecom and Upstage — advanced to the second phase of the national foundation model project, dropping two teams led by Naver Cloud and NC AI.

The project selected five consortia for the first phase after dropping big-name tech firms such as Kakao and KT. The ministry had originally planned to eliminate one team at each stage across three phases, leaving only two teams by the end of the year.

However, it eliminated two consortia in the evaluation for the second phase and abruptly announced it would recruit one additional consortium to join the project from the second phase, while guaranteeing the same supports such as graphics processing units (GPUs) to the newcomer.

The move has raised concerns over fairness, consistency and administrative preparedness for the separate selection process for a new team. Companies that were eliminated appear to have already concluded that the project carries more costs than benefits.

Naver Cloud and NC AI said they "respect the government's decision" but "will not reapply for the project."

Kakao, which has been offered a second chance, also said that it "will not take part in the wild card selection" adding that it believes it is better not to pursue another bid. KT is yet to make a decision.

“If things are not handled fairly, trust in the process and in the results could be undermined later on,” an industry official said, noting that the wild card selection might cause an inevitable disadvantage to existing teams.

“That is something the government must have considered carefully before making this decision. ... If the process is not carried out in a fair manner, people will not accept or acknowledge the outcome. And if that is the case, trust in the entire initiative may not be guaranteed in the long run.”

Minister of Science and ICT Bae Kyung-hoon speaks during a presentation for the national artificial intelligence foundation model project at Coex in Seoul, Dec. 30, 2025. Yonhap

A second AI industry official said the project succeeded in drawing public attention by taking the form of a competition, but the risk of being eliminated proved excessive for participating companies.

"If the rules change like this, it is inevitable to see all kinds of suspicions," the official said. "As soon as the wild card entry was announced, people began suspecting that it is aimed at salvaging Naver Cloud. From Naver’s perspective, there would be little reason to reapply while facing such suspicions. The moment the rules are changed, this kind of competitive model loses its trustworthiness."

The move may also raise questions of fairness regarding which teams apply for the wild card spot.

Any newly selected team will have to compete with rivals that have already secured GPU resources and datasets with a head start in developing their foundation models in line with the project’s criteria, which are advantages that are difficult to offset in the project’s compressed timeline.

The ministry defended the decision, saying it is an attempt to open the opportunity to participate to as many domestic AI firms as possible, rather than simply eliminate teams on a fixed schedule.

“Our goal is to make the best use of the resources the government has secured now, so that as many companies as possible can benefit from them and accelerate their technology development,” Second Vice Science Minister Ryu Je-myung said during a press briefing at Government Complex Seoul.

He noted that it wasn’t a hastily decided approach to favor any particular company.

“We are designing the process so that, while we will compress the administrative procedures as much as possible and move ahead with an additional selection, the overall project period and the amount of GPU resources provided will be kept the same as for the three companies that started earlier.”

A screen demonstrates NC AI's foundation model VARCO at its booth during a presentation for the national artificial intelligence foundation model project at Coex in Seoul, Dec. 30, 2025. Yonhap