On April 14, Lee Jae-myung, the former leader of the Democratic Party of Korea, announced on Facebook his presidential pledge to usher in an era of KRW 100 trillion investment in AI and to strengthen the National Artificial Intelligence Committee, a presidential body, to officially launch the 'K-AI' era. He also expressed his intention to promote the 'AI for All' project, allowing all citizens to use AI at the level of advanced countries for free, to create an era where work-life balance is possible under state leadership. This was the first presidential pledge announced before the candidate registration, indicating how seriously President Lee Jae-myung considers AI.


To realize this, the Ministry of Science and ICT announced a project in June to build a 'Sovereign AI' and a 'proprietary AI foundation model' tailored for Korean citizens. On August 4, five companies and consortia were selected to challenge the proprietary AI foundation model. Naver Cloud, Upstage, SK Telecom, NC AI, and LG AI Research Institute will receive support in GPU, data, and talent business to build the proprietary AI foundation. By the end of December, the first evaluation will narrow it down to four teams, and through competitive evaluations every six months, only two teams will be finally selected in 2027.

From GPU support to data purchase and talent support, the K-AI project pours in resources

The goal of the five selected teams is to develop a proprietary AI foundation model. A foundation model is a base model of AI created by learning data such as text, images, and voices. It is a versatile model that can be applied to various fields, not limited to specific tasks. OpenAI's GPT, Naver Cloud's HyperCLOVA X, and LG AI Research Institute's EXAONE are foundation models. The ultimate goal of this project is to create an AI-based model that can be used by all Korean citizens and companies without worrying about data leakage abroad.


The project allocates KRW 62.8 billion for the data sector, KRW 157.6 billion for GPU support, and KRW 25 billion for talent recruitment. The support scale can be adjusted according to deliberation and budget reflection. In the data sector, about KRW 10 billion is supported in a joint purchase format after consultation on the data applied by each team, and an additional processing cost of KRW 2.8 billion to KRW 4 billion is provided for AI model-specific data construction. High-quality broadcast video learning data of KRW 20 billion is also supported separately.

GPU support is focused on the three teams: Upstage, NC AI, and LG AI Research Institute. SK Telecom and Naver Cloud, as GPU rental suppliers, are excluded from direct support. SK Telecom supports two teams with 1,024 NVIDIA B200s, and Naver Cloud supports one team with 1,024 NVIDIA H100s. Additionally, 512 B200s from Alice Cloud are supported through separate competitions and projects. In the manpower sector, only Upstage expressed a desire for support, and annual support of KRW 2 billion is provided for attracting excellent overseas researchers and manpower, including personnel expenses, research expenses, and living expenses.

What are the compositions and specific goals of each of the five team consortia?

Naver Cloud will research and develop the source technology for the Omni Foundation Model so that all citizens can utilize AI. The Omni Foundation Model is a base model that includes the 'Omni' function, where AI comprehensively infers and understands text, voice, and video. Naver Cloud will operate a 'National AI Service Platform' based on the Omni Foundation Model, allowing anyone to develop, register, and distribute AI through the AI Agent Marketplace. The Naver Cloud consortium includes Naver, Twelve Labs, Seoul National University, Korea Advanced Institute of Science and Technology (KAIST), Pohang University of Science and Technology (POSTECH), Korea University, and Hanyang University's industry-academic cooperation groups.


Upstage aims to develop the world-class proprietary AI foundation model 'Solar WBL' and secure a sustainable domestic AI ecosystem. Over three years, it plans to secure more than 10 million users through public services and establish business-to-business and business-to-government services in fields such as law, manufacturing, defense, healthcare, and finance. The Upstage team includes Nota, Ravelup, Flitto, Muno, MakinaRocks, Law&Company, Orchestra, Day1Company, Allganize Korea, Korea Financial Telecommunications & Clearings Institute, Sogang University's industry-academic cooperation group, and KAIST.

SK Telecom aims to build a next-generation AI model to enhance national AI accessibility and industrial competitiveness through AI transformation. It particularly focuses on discovering AI use cases between companies and promoting public and industrial dissemination activities. The SK Telecom consortium includes Krafton, 42dot, Rebellion, Liner, SelectStar, Seoul National University's industry-academic cooperation group, and KAIST.


NC AI aims to build a foundation model based on 200 billion parameters and develop industry-specific foundation models for manufacturing and distribution, supporting the spread of proprietary AI industries. It plans to create a business-to-business transaction system with the platform and link multimodal cognitive-based AI to public government services. The NC AI consortium includes Korea University, Seoul National University, Yonsei University, KAIST, Electronics and Telecommunications Research Institute (ETRI), AIWORKX, POSCO DX, Lotte Innovate, HL Robotics, Internex, Mediazen, MBC, and NHN.


LG AI Research Institute recently unveiled EXAONE 4.0, raising its profile in the global AI industry. LG AI Research Institute aims to develop an AI foundation model that combines expertise and versatility, creating a comprehensive AI industry ecosystem accessible to everyone and leading the way in industrial and government AI adoption with exemplary cases. The LG AI Research Institute consortium includes LG Uplus, LG CNS, Superb AI, Furiosa AI, Friendly AI, ESTsoft, East Aid, Hancom, and Ruten Technologies.

The Ministry of Science and ICT cited evaluation factors such as whether the selected teams have proven high-level AI model capabilities and the willingness to develop and secure AI foundation models from scratch, whether they open AI foundation models through open source for commercial use by other companies, contributing to the overall domestic AI ecosystem, and whether they implement next-generation technology-based AI models that go beyond existing AI models and are applicable in the global market.

GDP could increase by up to 12.6%... Adoption itself is an international trend

The construction of a Korean-style AI foundation model is an AI project for all social communities in the Korean language region and a project linked to the country's future competitiveness. The Bank of Korea believes that AI adoption could increase the productivity of the Korean economy by 1.1% to 3.2% and GDP by 4.2% to 12.6%. More than half of domestic jobs will be significantly affected, and 24% of all workers could benefit greatly from AI productivity. This level could offset the slowdown in growth due to aging and a declining labor force.


Research and development are already underway overseas. Japan's Ministry of Economy, Trade and Industry (METI) has been conducting the GENIAC (Generative AI Accelerator Challenge) project since last year, aiming for AI ecosystem independence and innovation within the country. This project provides high-performance cloud resources to seven major operators, including startups and research institutions, to create proprietary generative AI solutions. GENIAC is currently in its third phase and aims to boost the overall Japanese AI ecosystem by enhancing the generative AI survival capabilities of each company, rather than building large-scale foundation models led by the state like in Korea.

France will support the AI ecosystem with EUR 3.4 billion (approximately KRW 5.45 trillion) by 2029. The project targets companies participating in generative AI, on-device AI, generative AI applications, and cloud service enhancement, with direct investments of over EUR 1 billion (approximately KRW 1.6 trillion) for companies integrating AI components into their business models.

The United Arab Emirates (UAE) has already invested USD 100 million (approximately KRW 138.9 billion) in developing 'Falcon,' an Arabic-based sovereign AI model, and will invest USD 91 billion (approximately KRW 126.4 trillion) in new AI and data-driven growth businesses across the UAE. Almost all advanced countries, including India, the UK, Canada, Singapore, and Taiwan, are investing at least hundreds of billions of won to develop their own generative AI and foundation models.

Consideration of technological sovereignty, economic ripple effects, and social impact is necessary


There are voices claiming that the selection of only four large companies and one startup for the Korean AI project is favoring large corporations, but the situation is not much different globally. Japan's GENIAC aims to support diverse AI companies, including many startups, but also includes large corporations like Toyota and Ricoh, as well as unicorn companies like Preferred Networks and Turing. France also extensively invests in large companies such as Mistral AI, Orange, Thales, and Prologis. It is seen as choosing the most efficient option.

The challenge ahead is not only whether the AI model is properly developed but also whether this service is smoothly applied to our industrial sites. Since most AI companies view securing demand as survival, AI created with taxes will be useless if it does not find appropriate demand. Fortunately, the government has already laid the foundation for securing initial demand through AI function development within the public sector cloud, utilization of ultra-large AI-based platforms, acceleration of public AI convergence, and realization of AI normalization. It is hoped that the collaboration of each consortium will yield results and serve as a foundation to invigorate industrial sites.

IT Donga Reporter Nam Si-hyun (sh@itdonga.com)

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