South Korea has set its sights on becoming a dominant force in the global artificial intelligence landscape, making significant investments in advanced GPU (Graphics Processing Unit) development and production. This strategic initiative aims to propel the nation to the forefront of AI innovation, fostering economic growth and enhancing its technological sovereignty.
The South Korean government recognizes AI as a national strategic technology and is actively promoting private investment through tax support. A proposed amendment to the Special Taxation Restriction Act aims to attract domestic companies to invest in the AI sector and foster related industries at the government level. If AI is designated, it will become the eighth field under this category, allowing industries to receive tax credits for R&D and facility investments. The Korea Chamber of Commerce and Industry has predicted that if AI is designated as a national strategic technology and tax credits are provided, it could generate more than ten times the added value compared to the tax reduction amount.
A core component of South Korea's AI dominance strategy is the significant investment in expanding AI computing infrastructure. The government plans to secure 10,000 advanced GPUs by the end of this year and has allocated a supplementary budget of KRW 1.9067 trillion for the artificial intelligence (AI) sector. This investment will establish clustered GPU infrastructure to expand national AI computing capacity, addressing the urgent national shortage of AI computing resources. In addition to securing GPUs, South Korea is also focused on developing its AI chip technology. The Ministry of Science and ICT (MSIT) plans to invest 1.02 trillion won (US 786 million dollars) over the next five years for AI chip R&D and expand joint research with advanced nations, including the United States.
The government also plans to build data centers with domestic AI chips and provide computing power for free to AI developers. Furthermore, the MSIT will launch a major initiative, tentatively titled the “World Best LLM Project,” supported by a budget of KRW 213.6 billion. This project will select five elite domestic teams and provide focused support over a period of up to three years, including access to GPUs, high-quality data, and top-tier personnel.
To further strengthen its AI capabilities, South Korea is actively pursuing international collaborations. Minister Yoo Sang-im, South Korea's Minister of Science and ICT, recently visited the United States to discuss collaboration with Nvidia on acquiring advanced graphic processing units (GPUs). South Korea has secured a graphics processing unit (GPU) supply agreement with NVIDIA, signaling a robust partnership aimed at enhancing bilateral cooperation with the United States in the realms of artificial intelligence (AI), cybersecurity, and advanced scientific research.
Despite these ambitious plans and significant investments, some industry experts remain skeptical about South Korea's ability to close the technology gap with the United States and China. Critics argue that simply acquiring GPUs is not enough and that greater emphasis should be placed on cultivating AI talent and developing domestic AI technologies. To address this concern, South Korea is also focusing on nurturing world-class AI talent. Three 'AI Chip-specialized graduate schools' have been established to produce skilled experts with master's and Ph.D degrees. The MSIT will operate the AI Pathfinder Project to attract world-class AI researchers from abroad, providing up to KRW 2 billion in annual support.
South Korea's push for AI dominance is driven by its desire for strategic autonomy and economic growth. By fostering a robust, homegrown AI ecosystem, South Korea aims to develop AI systems that are not controlled by foreign entities and align with its political values and priorities. As a technology exporter, South Korea recognizes that AI represents a multi-trillion-dollar opportunity to foster economic growth beyond its traditional industries.
