The South Korean government has proposed a budget of 4.7 trillion won, approximately $3.49 billion, to develop a domestic frontier AI model. This funding initiative, which awaits parliamentary approval, aims to create a national alternative to existing international AI solutions. The plan also includes a secondary track focused on integrating these locally developed models into the broader national economy.
The government is shifting away from its previous funding model, which provided $390 million to five selected companies. Instead, officials are launching an open competition that will be accessible to both established industry players and startups. While acknowledging the dominance of major US tech firms, the authorities believe that domestic models can effectively compete with leading open-source alternatives from China.
This initiative follows significant private and public investments in the country's AI infrastructure. In October 2025, Samsung and SK partnered with OpenAI to expand local AI capacity, while in June, the government and major semiconductor manufacturers announced a $590 billion investment to scale chip production. These efforts aim to reduce reliance on foreign AI services, which currently dominate consumer spending.
