Naver, Upstage, SK, NC, and LG picked as 5 finalists for bold gov't backing on AI creation

The Lee administration's plan to place South Korea among the world's top three AI powerhouses is taking shape given the selection of five teams to compete in the development of South Korea's own AI model.

Our economic correspondent Kim Do-yeon explains.

The South Korean government on Monday unveiled five AI creation teams to lead the country's push for AI sovereignty.

Naver Cloud, Upstage, SK Telecom, NC AI, and LG Group's AI team will now enter a high-stakes competition to develop the "Proprietary AI Foundation Model Project" worth 200 billion won or approximately 150 million U.S. dollars.

"The latest selection evaluated each team's technological capabilities and development experience, the scale of their development goals and strategies, as well as their potential impact and plans to contribute to the broader AI ecosystem."

Initially, 15 entered the race with the first round in July cutting down five to have 10 groups give presentations.

The final five, while big-name groups, are teamed up with universities and other tech companies to form consortia.

These five will now face a survival-style competition, with phased evaluations every six months—ultimately narrowing down to just two final teams by 2027.

The goal is to create domestic models that achieve at least 95 percent of the performance of the latest global AI models launched within the past six months.

The project also emphasizes "from-scratch" capabilities — including model architecture design and pretraining from the ground up not just adjusting existing foreign models.

This initiative is part of President Lee Jae Myung's core pledge to build an "AI for All" society and realize Korea's ambition to become one of the world's top three AI powerhouses.

The final five will now receive government backing, including access to high-performance GPUs.

First, until mid-2026, private-sector GPUs will be leased using 157-point-6 billion Korean won allotted from a recent supplementary budget.

Later, the government will provide up to a thousand GPUs per team from a pool of 10-thousand units purchased by the government.

Data support: Each team will also receive 10 billion won annually for data support, with an additional three to five billion won allocated for data construction and processing.

"A bold new challenge begins. We believe in the strength of Korea's AI companies and institutions—and the government will stand with them every step of the way."

Kim Do-yeon, Arirang News.