South Korea’s Bold AI Gambit: Government Drops Tech Giants in Push for Sovereign AI Dominance

Seoul cuts the cord from Big Tech, betting billions on homegrown artificial intelligence. The move reshapes the global AI race—and sends a clear signal about technological independence.

The Sovereign Shift

Forget partnerships. South Korea's latest national AI strategy bypasses established foreign and domestic tech titans entirely. The government is pouring resources directly into state-backed research institutes and a handful of chosen domestic startups. It's a high-stakes attempt to build a complete, sovereign AI stack—from chips to cloud to large language models—without ceding control or profits to corporate giants.

Why Go It Alone?

The rationale is equal parts security and economics. Reliance on external AI platforms creates strategic vulnerabilities and a perpetual drain on capital. By fostering a protected domestic ecosystem, policymakers aim to keep intellectual property, data, and future revenue streams within national borders. It's industrial policy for the algorithmic age, with a side of fierce digital protectionism.

The Finance Angle (With a Jab)

While the tech world debates model weights and parameters, the finance guys are already pricing in the potential subsidies and tax breaks—because nothing says 'innovation' like a good old-fashioned government handout. The real test won't be a benchmark score, but whether this multi-billion-dollar moonshot can produce anything the global market actually wants to buy, or if it becomes a very expensive, very smart national monument.

South Korea just rewrote the rulebook. The world is watching to see if sovereign AI is a visionary blueprint or a spectacularly costly lesson in going solo.

Scoring criteria for the evaluation process

The two government agencies in charge of the assessment process were the Telecommunications Technology Association and the National IT Industry Promotion Agency. The teams were assessed using three criteria.

40 points were awarded for benchmark testing. This section evaluated the AI systems’ ability to comprehend language, solve issues, and produce written material.

35 points came from expert reviews. Experts examined the models’ training and design processes as well as whether the technology was genuinely novel.

The final 25 points came from user comments. The reliability and practicality of the systems were assessed in this section.

LG AI Research won all three categories. Reviewers emphasized SK Telecom‘s reliable operations and strong infrastructure. Upstage was acknowledged for its technological efficiency despite its small size.

The government explained why Naver Cloud was taken down. Officials claimed that the company’s proposal did not meet the criteria that models be built “from scratch.”

Reviewers from outside the company discovered that Naver’s vision encoder, which handles photos and visual data, was nearly identical to one made by Alibaba’s Qwen system in China. More than 99% of the weights in the two models matched. Naver Cloud supported this strategy, claiming that it improved performance and assisted with worldwide compatibility.

However, the ministry determined that the competition’s goal of attaining technical independence was undermined by modifying or utilizing significant components from foreign models.

NC AI, the NCSoft team, likewise failed. The group did not receive enough points to advance to the following round. Specific scoring information for this squad was not disclosed by the ministry.

The path forward

Naver Cloud declared today that it will not contest the ministry’s decision. The business intends to continue supplying the project with GPU infrastructure. Outside of this government competition, it will also focus on developing its own AI technologies.

Four teams should remain in the competition, according to the government. To fill the vacancy, officials said they will conduct another round of selection in the first half of 2026. Businesses including Kakao, KT, and Konan Technology who were rejected in previous phases will get another opportunity to participate.

The government plans to pick two final winners by 2027. Those teams will receive major backing from the state. Support includes access to KRW 1.9 trillion worth of powerful computing equipment and large national datasets.

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