South Korea proposes $3.49 billion in state equity funding to build a homegrown frontier AI model
The 4.7 trillion won plan in the 2027 budget would open a new competition to startups and needs approval from parliament.
South Korea's government plans to back a homegrown frontier AI model with government equity investments of 4.7 trillion won ($3.49 billion), The Decoder reports. The money is part of the proposed 2027 budget and still needs approval from parliament. A second funding track would support the adoption of Korean-built models across the country's economy. The two finalists of the current national model competition, which involves LG AI Research, SK Telecom and Upstage, will not automatically receive the new money. Instead, the government is launching an open competition that startups can also enter. Officials have acknowledged that Korea cannot compete with the largest US companies but say it can match the leading open models from China. When the current competition began, the government pledged 530 billion won, about $390 million, to the five selected companies, so the new plan is roughly nine times larger. That is still small compared with the roughly $725 billion that Google, Amazon, Microsoft and Meta plan to invest in 2026 alone, mostly in AI data centers. The plan shows how mid-sized economies are setting targets for sovereign AI below the US frontier while still spending heavily to stay competitive.