South Korea has launched its most ambitious sovereign AI initiative, pledging ₩530 billion to five local companies developing large-scale foundational models designed to compete directly with OpenAI, Google and other global giants.
The government will review progress every six months, cutting underperformers whilst continuing to fund frontrunners until just two remain to lead the country’s AI drive, reports TechCrunch.
The Ministry of Science and ICT selected LG AI Research, SK Telecom, Naver Cloud, NC AI and startup Upstage for the programme, which aims to reduce reliance on foreign AI technologies whilst strengthening national security and data control.
LG AI Research offers Exaone 4.0, a 32-billion-parameter hybrid reasoning model that focuses on efficiency rather than massive GPU clusters. The company plans to leverage deep access to real-world industry data spanning biotech to advanced materials and manufacturing.
SK Telecom’s A.X 4.0 model, built on Alibaba Cloud’s open source Qwen 2.5, processes Korean inputs 33 per cent more efficiently than GPT-4o. The telco giant’s personal AI agent service has attracted 10 million subscribers as of August 2025.
“SK Telecom’s role is to act as a bridge between cutting-edge model research and real-world impact. With our telecom infrastructure, extensive user base and proven service like A., we bring AI directly into everyday life, whether in customer service, mobility, or manufacturing,” Taeyoon Kim, head of the foundation model office at SK Telecom, said.
Naver Cloud’s HyperCLOVA X represents the only Korean company claiming a complete AI full stack, embedding its technology across search, shopping, maps and finance services similar to Google’s approach.
Startup Upstage’s Solar Pro 2, with 31 billion parameters, was the first Korean model recognised as a frontier model by Artificial Analysis. “Solar Pro 2 has outperformed global models on major Korean benchmarks. With this project, Upstage aims to achieve a Korean language performance of 105% of the global standard,” said Soon-il Kwon, executive vice president at Upstage.
