Naver, LG, SK, NC, Upstage named to build S.Korea’s sovereign AI model to challenge ChatGPT

The five elite teams are the national AI champions selected to reduce Korea’s dependence on foreign AI tech

AI chip (Courtesy of Samsung Electronics)
AI chip (Courtesy of Samsung Electronics)
Eun-Yi Ko and Young-Ae Lee 3
2025-08-04 20:52:15 koko@hankyung.com
Artificial intelligence


South Korea has chosen five technology firms, including LG, Naver and SK Telecom Co., to spearhead the country’s flagship sovereign AI initiative, as Seoul moves to build large-scale artificial intelligence models independent of US tech giants such as OpenAI, the operator of ChatGPT.

The Ministry of Science and ICT on Monday announced the selection of five “elite teams” to develop foundation models that aim to match 95% of the performance of leading global systems like ChatGPT.

The winners – Naver Corp. affiliate Naver Cloud, AI startup Upstage, SK Telecom, NCSOFT Corp. unit NC AI, and LG Group’s LG AI Research – will receive sweeping support over two years, including high-performance computing infrastructure, extensive datasets and salary subsidies for AI talent, according to the ministry.

SK Telecom is a member of the Global Telco AI Alliance
SK Telecom is a member of the Global Telco AI Alliance

The project, one of President Lee Jae-myung’s signature policies, underscores Seoul’s push to reduce its dependence on foreign AI technologies that could expose its industries to geopolitical and economic risks.

OPEN-SOURCE TECHNOLOGY

“These five teams proposed ambitious goals, from designing multilingual multimodal models that process text, images and audio, to building globally competitive large-parameter systems from scratch,” the ministry said in a statement.

The selected groups will gain access to 512 to 1,024 graphic processing units (GPUs) – hardware with an estimated value of up to 157.6 billion won ($114 million) – for training their models through the first half of next year, in addition to funds for building and processing training datasets.

LG Electronics CEO Cho Joo-wan announces LG-Microsoft partnership on AI agent development at CES 2025
LG Electronics CEO Cho Joo-wan announces LG-Microsoft partnership on AI agent development at CES 2025

Upstage, a domestic startup focused on AI infrastructure, will also receive direct financial support for hiring skilled personnel.

In a bid to foster a vibrant AI ecosystem, all five teams are required to make public more than half of their models as open-source technology.

Government officials expect local firms and public agencies to adapt these sovereign AI systems for applications ranging from education and public services to industry-specific tools.

“The program is effectively a 1 trillion won contract for each team if you consider follow-up vouchers and downstream opportunities,” said a senior investment banker.

NC AI is a unit of NCSOFT Corp.
NC AI is a unit of NCSOFT Corp.

KAKAO, KT, KONAN, MOTIF, KAIST DROPPED OUT OF RACE

Competition for the project was fierce, with several of Korea’s top AI players vying for rare government-backed access to large-scale GPU resources.

Companies such as Kakao Corp., KT Corp., Konan Technology Inc. and Motif Technologies Inc., as well as academic consortia led by KAIST, dropped out of the race in the second round of evaluation.

Sources said the losing bids struggled to present sufficiently diversified consortia or compelling strategies for spreading AI adoption across sectors.

Upstage is a Korean AI startup
Upstage is a Korean AI startup

TWO FINALISTS BY 2027

The government plans to trim the number of teams from five to four by year-end following a third evaluation round, gradually reducing the group to just two finalists by 2027.

To ensure transparency, officials plan to roll out a public leaderboard allowing citizens to test and compare AI performance.

“The public will be able to experience the models directly through a national contest,” a ministry official said.

Some experts have raised concerns that the elimination-based contest format could encourage short-term tactics aimed at winning government funds, rather than the agile innovation needed in the fast-evolving AI field.

Naver Cloud is a Naver affiliate
Naver Cloud is a Naver affiliate

“The risk is a showy competition focused on meeting bureaucratic milestones rather than adapting to technological shifts,” said a tech industry executive.

Still, analysts said the program marks Korea’s most ambitious state-led effort yet to close the gap with US and Chinese AI giants such as DeepSeek, and establish its own champions in a technology expected to define the next era of industrial and economic power.

Write to Eun-Yi Ko and Young-Ae Lee at koko@hankyung.com

In-Soo Nam edited this article.

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