South Korea's Science Minister Bae Kyung-hoon on Friday, 31 May pledged intensified government support for the country's artificial intelligence sector, declaring that South Korea must now pursue the development of a frontier AI model capable of competing with leading systems from the United States and China. Speaking at a press conference in Seoul, Bae outlined a vision of South Korea as a 'full-stack' AI provider — covering chips, infrastructure, foundation models, and applications end to end.

Where South Korea Stands

Bae acknowledged significant progress, noting that Stanford University's AI Index ranked South Korea as the third-largest AI power in the world last year. However, he was candid about the investment shortfall, particularly in infrastructure. 'I think the government budget earmarked for AI is only close to the amount of investments from one U.S. big tech company,' he said, underscoring the scale gap between Seoul's public commitments and the firepower of Silicon Valley's largest players.

Foundation Model Race Under Way

The minister's remarks come as a government-led selection process for South Korea's homegrown AI foundation models is actively under way. Four teams — LG AI Research, SK Telecom Co., and startups Upstage and Motif Technologies Inc. — cleared the first round of evaluation. The second-round results are expected to be announced in early August, with the survivors set to receive state backing for frontier model development.

GPU Buildout and Local Chip Push

On the infrastructure front, the Science Ministry is working to expand data centre capacity, leveraging more than 260,000 GPU units secured from NVIDIA Corp. last year. Bae also highlighted a parallel push to integrate neural processing units (NPUs) — advanced chips used in AI machine learning — produced by domestic South Korean manufacturers, signalling a deliberate effort to reduce dependence on foreign semiconductor suppliers.

AI Wealth Distribution Enters Policy Debate

Bae also weighed in on one of the more contentious domestic debates: how to redistribute the windfall profits generated by the AI boom. Discussions within the South Korean government have included proposals for public redistribution of tax surpluses and corporate profits from the country's major chipmakers, with a presidential official previously drawing attention for suggesting 'citizen dividends.' Bae stopped short of endorsing that proposal, instead framing equitable AI access as the more sustainable path. 'One of the ways to address this issue is to establish a system where every person has access to and can utilise at least one AI agent ... allowing everyone to participate in economic activities through AI and ensuring equal opportunities for all,' he said. He described job displacement and wealth concentration as 'inevitable problems in the AI era' that policy must actively address.

What Comes Next

The second round of the foundation model selection process will be a key near-term milestone, with results due in early August. How Seoul bridges its infrastructure investment gap — and whether the NPU localisation push gains traction — will determine whether South Korea's full-stack ambition moves from policy rhetoric to competitive reality.