South Korea has chosen five major tech players to lead the creation of domestic artificial intelligence (AI) foundation models, an effort aimed at reducing reliance on foreign technology and strengthening digital independence. On August 4, the Ministry of Science and ICT confirmed that LG AI Research, SK Telecom, Upstage, Naver Cloud, and NC AI were selected from a pool of 15 applicants under the government’s “Sovereign AI” initiative.
These five consortia, now regarded as Korea’s “national AI champions,” will receive a total of 200 billion won ($147 million) in support, including access to large-scale data, high-performance GPUs, and other resources essential for building large language models with domestic technology. While these industry leaders secured their expected spots, game developer NCSoft’s AI unit also advanced, leaving out major players Kakao and KT, whose dependence on foreign partnerships reportedly weakened their bids.
The project is central to President Lee Jae-myung’s ambition to position South Korea among the world’s top three AI leaders. Science Minister Bae Kyung-hoon emphasized that each chosen team has demonstrated the capacity to build high-level AI models, calling the initiative the official start of Korea’s “sovereign AI journey.” Industry officials echoed this view, describing the program as a critical turning point for digital independence and the country’s long-term AI competitiveness.
A major goal of the initiative is to catch up with frontier-level AI capabilities currently led by the U.S. and China. Government officials highlighted that the AI sector tends to be dominated by only a handful of powerful companies, creating a “winner-takes-all” dynamic. To compete effectively, South Korea aims to develop its own foundation models from the ground up, minimizing reliance on foreign technology and fostering a uniquely Korean AI ecosystem.
To support this mission, the government has committed 530 billion won ($383 million) by 2027. The investment plan allocates 450 billion won for GPU infrastructure, 62.8 billion won to secure large-scale training datasets, and 25 billion won for talent recruitment. The overarching target is to raise Korea’s AI capabilities to 95% of frontier models, such as those developed by OpenAI. Officials underscored that securing computing power is especially critical, with one industry insider noting that “AI competition is a GPU war.”
The government will provide GPUs to selected companies beginning this month, using funds from a supplementary budget. Additional support will include access to vast datasets from institutions such as the National Archives, Statistics Korea, and the National Institute of Korean History, alongside 200 billion won worth of broadcast video data to train advanced multimodal systems. These resources are expected to accelerate development while ensuring that the AI models are tailored to the Korean language and culture.
Each of the five teams brings distinct expertise and collaborative partners. Naver Cloud is working with U.S. startup Twelve Labs and domestic universities to build an omni foundation model capable of handling text, images, audio, and video. Upstage, joined by startups like Nota and Flitto, plans to advance its Solar LLM into a world-class foundation model. SK Telecom’s group, which includes Krafton and chipmaker Rebellions, aims to create both general-purpose AI agents and specialized business applications. NC AI, backed by NCSoft and several universities, is developing a 200-billion-parameter large language model, while LG AI Research, working with subsidiaries like LG Uplus and LG CNS, seeks to combine specialization with general-purpose capabilities to build a full-stack AI ecosystem.
The five teams will officially be designated as “K-AI Models” and “K-AI Companies,” cementing their roles as the country’s flagship AI developers. The government plans to review its progress every six months, gradually narrowing the field until only two remain by 2027. Teams that do not advance will still have opportunities to contribute through projects focused on specialized or sector-specific AI. This competitive process is intended to drive innovation and ensure that only the most capable models reach global standards.
For the selected companies, the designation brings both prestige and pressure. While officials and industry leaders praised the initiative as a landmark step for Korea’s AI sector, participants acknowledged that the road ahead will be highly competitive. As one team member put it, “We’re proud to be chosen, but the real race starts now.”
