South Korea proposes a 4.7 trillion won ($3.49 billion) equity investment in its 2027 budget to develop a homegrown frontier AI model capable of rivaling China's best. The Ministry of Science and ICT plans to restructure its AI development program into two tracks, launching an open competition that includes startups rather than automatically funding current finalists. While officials acknowledge they cannot match US tech giants, they aim to secure independent foundation model technology.
Proposed frontier AI model investment
- ▪Second Vice Minister of Science and ICT Ryu Je-myung stated on October 2, 2026, that South Korea aims to develop an artificial intelligence model competitive with leading Chinese open models
- ▪South Korea's Ministry of Science and ICT plans to split its artificial intelligence development program, known in Korean as Dokpamo, into a frontier model project and a separate track for industrial deployment
- ▪The investment structure for South Korea's planned frontier artificial intelligence model, part of the Dokpamo program, remains undecided, with options including a consortium or a special-purpose company involving major companies and startups
- ▪South Korea's proposed 2027 budget includes a 4.7 trillion won ($3.49 billion) equity investment to develop a homegrown frontier artificial intelligence model aimed at rivaling China's best AI models, subject to National Assembly approval
Consumer spending on artificial intelligence
- ▪South Korean consumers have primarily paid foreign providers for artificial intelligence services
- ▪In December 2025, South Korean consumers spent more on subscriptions for foreign artificial intelligence services like ChatGPT than on Netflix subscriptions
Samsung and SK Group initiatives
- ▪In October 2025, Samsung and SK Group struck a deal with OpenAI to expand artificial intelligence infrastructure in South Korea
- ▪In June 2026, Samsung, SK Hynix, and the South Korean government announced a $590 billion initiative to scale up domestic semiconductor chip production
Debatable claims
- ▪South Korea should focus on AI industrial deployment rather than building a frontier model
- ▪Direct equity investment in commercial AI development is an inappropriate role for the South Korean government
- ▪South Korea's proposed $3.49 billion investment is too small to build a competitive frontier AI model
- ▪Opening the new AI funding competition to startups unfairly penalizes the current corporate finalists
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