Deputy PM Bae calls for W3.5tr investment to develop frontier AI

Deputy Prime Minister and Minister of Science and ICT Bae Kyung-hoon speaks at a press briefing held Monday morning at Government Complex Sejong, marking the first anniversary of his appointment. [Ministry of Science and ICT]

"If the past year was about laying the groundwork for South Korea to emerge as an AI powerhouse, the time ahead must be about delivering results that people can actually feel."

Deputy Prime Minister and Minister of Science and ICT Bae Kyung-hoon said the government would pursue frontier AI development — the most advanced class of AI models — alongside its existing independent foundation model initiative. He also outlined plans to expand AI agents for use in everyday life.

Bae made the announcement at a press briefing marking the first anniversary of his appointment, saying "securing service competitiveness beyond the AI model race is the core challenge going forward."

Bae identified the past year's most significant shift as the emergence of broad social consensus on the need to develop South Korea's own AI.

"In the past, there were many questions about why we needed our own AI and whether it was right for the government to purchase and supply GPUs," he said. "Those questions have largely faded. I believe a consensus has formed around the need for an independent AI."

Looking ahead, however, he said competitive edge would be determined less by the AI model itself than by how well services are built around it.

"Building an independent foundation model is not the end goal," Bae said. "In the age of AI agents, what matters more is how well we deliver services that people actually use."

The government is moving ahead with its "AI for All" project in line with that vision.

"I do not expect to replace all foreign AI services right away," Bae said, "but the plan is to first deliver services in the public sector — creating new benefits that foreign providers do not offer — and then roll out AI agent services that citizens can experience starting in the second half of next year."

The government's AI strategy is also expanding from its original focus on an independent foundation model to a two-track approach that pursues frontier AI development in parallel.

"The independent foundation model was aimed at transforming public services and industrial AI," Bae said. "We are now shaping a strategy that also pursues frontier AI models to secure world-class competitiveness."

He projected that frontier AI development would require an investment of at least 3.5 trillion won ($2.36 billion).

"This is an investment we absolutely must make to become one of the world's top three AI nations," he said, adding that the ministry was in close consultation with the Finance Ministry and other related ministries.

Bae also outlined the government's global AI cooperation strategy.

"During overseas visits, I confirmed that many countries want AI cooperation that is not dependent on the United States or China," he said. "We intend to build an AI coalition centered on K-AI and grow into a country that provides full-stack AI."

On cooperation with China, however, Bae struck a cautious note, saying it was "a matter requiring policy judgment that must weigh our relationship with the United States and other factors comprehensively."

Meanwhile, First Vice Minister of Science and ICT Koo Hyeok-chae said, regarding research and development innovation, that "the R&D budget cut under the previous administration has been restored to a record high, and efforts are underway to streamline research administration and improve the project-based system." He added that the ministry would "build an ecosystem where research outcomes feed into industry through technology commercialization and expanded investment-based R&D."

On technology commercialization, Koo said the government would "ease startup regulations for government-funded research institutes and science and technology institutes, and expand investment-based R&D to ensure research results translate into real industrial outcomes."

nbgkoo@heraldcorp.com