# South Korea plans $3.49 billion homegrown AI model

> Seoul will back a frontier AI project with up to 4.7 trillion won, aiming to match China’s leading models.

Oossa · 2026-10-06 · https://oossa.com/en/south-korea-plans-3-49-billion-homegrown-ai-model

The South Korean government is preparing a budget that would invest 4.7 trillion won (about $3.49 billion) in a domestic frontier AI model. The money would come from equity stakes and is slated for the 2027 fiscal plan, but it still needs parliamentary approval. A second track of funding will help Korean companies adopt the home‑grown model across various industries.

## How the program will work

Three groups – LG AI Research, SK Telecom and Upstage – are currently in a competition for the first round of support. The government says they will not get automatic grants; instead an open contest will let startups join. Officials note that while they cannot outspend the biggest U.S. firms, they aim to reach the level of China’s most advanced open models.

## Industry backdrop

Korea is already expanding its AI compute base. In October 2025 Samsung and SK Telecom signed a deal with OpenAI to add more AI infrastructure. Earlier in June, Samsung, SK Hynix and the state announced a $590 billion effort to boost chip production. Korean users have been spending more on foreign AI services than on entertainment; in December 2025 they paid more for ChatGPT‑type subscriptions than for Netflix.

## The facts

- The proposed budget allocates 4.7 trillion won (≈$3.49 billion) for the AI model.
- The initial pledge in the first competition was 530 billion won (≈$390 million).
- Google, Amazon, Microsoft and Meta together plan about $725 billion of AI investments for 2026.
- Samsung, SK Telecom and OpenAI signed an AI infrastructure deal in October 2025.
- In December 2025 Korean consumers spent more on ChatGPT‑like services than on Netflix.

## Why it matters

If the funding is approved, Korean businesses could access homegrown AI tools instead of relying on foreign providers, potentially lowering costs and keeping data within the country. For everyday users, this might mean new Korean‑language AI services that better understand local nuances. However, the plan’s success depends on parliament’s approval and on whether the model can match the performance of existing Chinese or Western systems.

## Sources & references

1. [South Korea bets $3.49 billion on building a homegrown frontier AI model to rival China's best](https://the-decoder.com/south-korea-bets-3-49-billion-on-building-a-homegrown-frontier-ai-model-to-rival-chinas-best/) – The Decoder, 2026-10-06

Last updated: 2026-10-06