LEE'S 1ST YEAR IN OFFICE Gov't push for AI lays groundwork for businesses; tangible outcome yet to come
Private investments lag behind AI superpowers, yet clearer goals still needed
President Lee Jae Myung applauds with tech business leaders during his meeting with Nvidia CEO Jensen Huang, third from left, in Gyeongju, North Gyeongsang Province, Oct. 31, 2025. From left are Naver Chairman of the Board Lee Hae-jin, SK Group Chairman Chey Tae-won, Huang, Lee, Samsung Electronics Executive Chairman Lee Jae-yong and Hyundai Motor Group Executive Chair Chung Euisun. Courtesy of Cheong Wa Dae
Editor’s note
This is the fourth in a series of articles examining economic, political, diplomatic and social changes that have occurred during the Lee Jae Myung administration since the president’s inauguration on June 4, 2025.
During his first year in office, President Lee Jae Myung pursued aggressive policy pushes to achieve his ambitious goal of elevating Korea as one of the world’s top three artificial intelligence (AI) powerhouses.
The approach has drawn largely favorable responses from experts and industry officials, though they noted that key challenges remain over whether the administration can sustain the momentum throughout the remainder of Lee’s term and whether the policies can be implemented quickly and effectively enough to keep pace with the rapidly evolving landscape of the global AI industry.
The Lee administration launched the Presidential Council on National AI Strategy in September 2025. For the past year, it helped the public and private sectors jointly secure 260,000 advanced graphics processing units (GPUs), while the country’s AI investment budget more than tripled from 3.3 trillion won in 2025 to 9.9 trillion won in 2026.
The government also enacted the world's first comprehensive AI framework law in January and launched the national AI foundation model project to encourage companies to develop domestic AI models in support of AI sovereignty.
Such efforts earned Korea global recognition. In April, Stanford Institute for Human-Centered AI selected eight AI models developed by Korean institutions as notable, the third-largest number in the world. In January, AI competitiveness benchmark tracker Artificial Analysis recognized Korea as the “clear #3 nation in AI,” citing the country's national sovereign AI initiative.
With AI being a priority in national policy, the president himself has met with the world’s leading AI executives, including OpenAI CEO Sam Altman, Amazon Web Services CEO Matt Garman, Nvidia CEO Jensen Huang and Google DeepMind CEO Demis Hassabis. Many of those meetings resulted in investment or supply commitments to Korea.
President Lee Jae Myung speaks during the launching ceremony of the Presidential Council on National Artificial Intelligence Strategy in Seoul, Sept. 8, 2025. Korea Times photo by Wang Tae-seog
He also appointed a senior presidential secretary for AI policy and future planning, as well as appointing former LG AI Research head Bae Kyung-hoon to helm the Ministry of Science and ICT.
Under Bae’s leadership, the ministry launched the national AI foundation model project in August with the goal of developing foundational large language models using purely domestic technology to achieve global competitiveness and secure digital sovereignty. Consortia led by Korea’s leading tech firms are participating in the project, with two winners to be selected next year.
“It is commendable that the government elevated AI to the level of a national strategic industry and gave it policy priority,” an AI industry official said on condition of anonymity.
“In particular, the government has been making efforts to support areas the industry specifically needs, such as securing GPUs and expanding AI infrastructure at the national level. It is also true that the public sector has been putting greater emphasis on AI transformation.”
A chart from Stanford University Human-Centered Artificial Intelligence's (AI) 2026 AI Index Report, which shows Korea ranking 12 in private AI investment / Captured from Stanford University Human-Centered Artificial Intelligence website
However, industry officials said that Korea’s standing in the private sector still falls short of the world’s top three, significantly lagging behind major countries such as the United States and China amid the massive capital and infrastructure race led by global Big Tech firms.
According to the Stanford report, Korea’s private-sector AI investment in 2025 stood at $178 million, ranking 12th in the world. The U.S., which ranked first, recorded $285.9 billion in investment, more than 160 times larger than that of Korea. China, the second-largest, also far outpaced Korea with $12.4 billion.
A report titled “Venture Capital Investments in AI through 2025,” published in February by the OECD AI Policy Observatory, noted that firms in the U.S. attracted $194 billion, or approximately 75 percent of global AI venture capital deal value. European Union countries followed with 6 percent and China with 5 percent.
Korea was not separately counted in the tally, with the only Korean-related case specifically mentioned being semiconductor firm FuriosaAI’s $125 million Series C funding round.
“What matters most is whether enough capital can flow into the private sector,” another AI industry official said. “The government is offering various forms of policy support, but it is difficult to gain a meaningful edge when Big Tech firms are driving the market with massive scale and financial power.”
Deputy Prime Minister and Science Minister Bae Kyung-hoon, front row center, and Ha Jung-woo, sixth from left, then senior presidential secretary for artificial intelligence (AI) policy and future planning, pose with participants of the national AI foundation model project during the project's first-stage presentation at Coex in southern Seoul, Dec. 30, 2025. Newsis
Industry officials said while the Lee administration’s AI policies for the past year have been encouraging, there is a need for further fine-tuning to address whether the government’s efforts are sustainable, what specific goals they are intended to achieve and whether they are moving quickly enough to keep pace with the rapidly evolving global AI landscape.
“For example, the goal of the national foundation model project is establishing a model that every Korean can use, but that requires reasoning capabilities on par with the world’s leading models such as OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini,” the first industry official said.
“If the project truly aims to create an AI model used by everyone, it will eventually need to develop models capable of advanced reasoning. But so far, the project mainly appears focused on selecting top companies, without clearly showing an action plan on how the country can have such an advanced model through the project.”
A third industry official pointed to the current lack of a senior presidential secretary for AI and future planning. The president earlier appointed the former head of Naver Cloud’s AI Innovation Center, Ha Jung-woo, as the inaugural secretary. However, Ha stepped down in late April to run in a parliamentary by-election, leaving the post vacant.
“Policy support is certainly welcome, but in the end, it all comes down to how to secure experts,” the official said. “Individual companies are already making efforts to recruit AI experts, and the government appears to be doing the same … Finding someone capable of overseeing and leading the country’s overall AI strategy is a major challenge.”