South Korea races to close AI gap as global tech giants tap the brakes

SK Telecom, LG Group and Upstage push for sovereign AI ahead of final two-team selection early next year

Big tech calls for slower AI development pace

'For Korea, this is an opportunity to close the gap fast'

Visitors gather at the A.X K1 demonstration booth during the first public showcase of the independent AI foundation model project on Dec. 30, 2025. [SK Telecom]

Even as global AI giants call for a slowdown in the pace of artificial intelligence development, South Korea is pressing harder than ever to build its own sovereign AI capabilities.

The three contenders leading the country's independent foundation model project — SK Telecom, LG AI Research and Upstage — are pouring resources into securing homegrown technology and reducing reliance on foreign AI, with a final evaluation early next year set to cut the field to two teams.

Some in the industry argue that the very moment big tech pulls back could give South Korea a rare opening to close the technology gap at speed.

According to industry sources Tuesday, the three teams that passed the project's second evaluation are making a final push to sharpen their proprietary AI technology before the last assessment. The government-backed initiative aims to develop an independent AI model built on domestic technology; after the final evaluation, two of the three remaining teams will be selected early next year.

A visitor tries SK Telecom's A.X K1 model at the first showcase of the independent AI foundation model project, held at COEX in Gangnam-gu, Seoul, on Dec. 30, 2025. [SK Telecom]

SK Telecom has emerged as the standout performer, winning consecutive selections for national AI projects this year, including the foundation model initiative.

The company drew particular attention after it was belatedly revealed that its team had ranked first in the project's second evaluation.

According to the Ministry of Science and ICT, SK Telecom's team topped the second-stage assessment with a composite score of 70.6 points. Upstage followed with 69.9 points, LG AI Research scored 69.0 and Motif came in at 65.8.

SK Telecom also led the expert user evaluation — in which 49 heads of AI startups participated — scoring 11.6 points. It ranked first as well in the National Information Society Agency (NIA) benchmark, which covers seven categories including Korean-language performance and reliability, recording 13.4 points.

Industry observers say that at this rate, SK Telecom is well positioned to maintain its technological edge when the final two teams are chosen early next year.

SK Telecom was also selected on Aug. 28 for the "AI for All" project, a government initiative to build chatbots and other tools that give the public free access to AI. The company plans to roll out AI agent services free of charge across sectors including education, finance, small businesses, public services and healthcare, social welfare, investment and venture, AI technology and security, and lifestyle.

The public-facing service is expected to accelerate the expansion of an ecosystem built on the company's own technology.

A file image related to the independent AI foundation model project. [Generated by AI]

LG AI Research, meanwhile, is focused on maximizing the performance of its model toward a globally competitive superintelligent AI in a bid to secure one of the two final spots.

The lab has particularly underscored AI technology that can be applied directly to specific industries — manufacturing, finance and science among them — to solve real-world problems on the ground.

Lim Woo-hyung, co-director of LG AI Research, expressed confidence at the "LG AI Talk Concert 2026" held Monday at LG Science Park in Magok, Gangseo-gu, Seoul. "We have solved more than 100 cumulative problems at industrial sites," he said. "We have published 368 papers at top global academic conferences and filed more than 1,000 domestic patents. This is world-class AI capability."

LG is also eyeing the development of an artificial general intelligence model, a direction several global AI firms have recently pursued. "Exaone also aims to be an AGI model," Lim said. "We will develop AI that raises the performance of a general-purpose model while also achieving specialized intelligence that surpasses general AGI in specific domains."

Upstage, for its part, is channeling its competitive energy into expanding real-world usage of its technology. Its proprietary model Solar 4 ranked 10th globally in daily token usage on the open-source developer platform OpenRouter as of Aug. 20, reflecting rapid growth in actual deployment.

In the ICT industry, some observers see the global calls for a slower AI development pace as an opportunity for South Korea, coming as the foundation model project nears its finish line.

"There is talk that AI technology is evolving too fast and needs to slow down, but South Korea still needs to push the accelerator to the floor," an industry official said. "We should treat this as a chance to close the gap with the world's top-tier models as quickly as possible."

sjpark@heraldcorp.com