South Korea Allocates $3.49B for Homegrown AI Model Development

South Korea's government has committed $3.49 billion (4.7 trillion won) to develop a homegrown frontier AI model aimed at rivaling China's leading technologies. This funding includes an initial pledge of 530 billion won (approximately $390 million) to five selected companies, including LG AI Research, SK Telecom, and Upstage, which are all key players in AI model development. Samsung will support the necessary AI infrastructure, while SK Hynix will contribute to chip production efforts. This initiative follows a deal struck in October 2025 between Samsung, SK, and OpenAI to enhance AI capabilities. Additionally, South Korean consumers spent more on ChatGPT and similar subscriptions in December 2025 than on Netflix, indicating a growing market for AI services. In contrast, major tech companies like Google, Amazon, Microsoft, and Meta plan to invest a combined $725 billion by 2026, highlighting the competitive landscape. South Korean officials assert that while the country may not compete with the largest US firms, it can match the leading open models from China.