[Editorial] Fast-paced AI race

The South Korean government seems to be aware that artificial intelligence increasingly plays a crucial role in diverse technology sectors and it is imperative to invest more in related industries through research and development.

In a sign of its awareness, the Ministry of Science and ICT focused on digital transformation and job creation through AI initiatives Tuesday when it unveiled its major yearly plans for this year.

As with other state-run policies with budget limitations, however, the Science Ministry’s investment plans appear far from sufficient, especially following a huge AI investment plan newly announced by OpenAI CEO Sam Altman.

At the heart of the ministry’s AI initiatives for 2024 are discovering and nurturing new AI-powered businesses and services, which in turn will drive economic growth and create jobs in the coming years. The ministry said it would help set up a comprehensive AI ecosystem by enticing AI-based production innovation and pushing for deregulation in the broader economic and industrial sectors.

Unfortunately, the Korean government has long pledged to lift complex and cumbersome regulations that hinder the growth of innovative solutions and startups, but its scorecard has been for the most part unconvincing, if not disappointing.

One reason is that the Korean government, including the Science Ministry, has faced criticism from companies and experts that it is reluctant to remove outdated regulations, but quick to set up new, untested regulatory legislations that could stifle the innovation of certain industries, demonstrated by the Fair Trade Commission’s dispute-laden attempt to introduce the "platform act."

In contrast to its ambiguous talk about deregulation efforts, there is one specific sector that the ministry said it will help expand: on-device AI, which refers to solutions that can run locally on devices such as smartphones rather than in the cloud servers that require the internet connection. It will implement an on-device AI activation strategy, based on home-grown AI chips, to help local players take the leading position in the nascent segment.

Samsung Electronics already jumped into the competition, featuring on-device AI functionalities on its latest flagship S24 smartphone series. With the early adoption, Samsung is said to have, at least for a while, outpaced its rival Apple, which is expected to apply on-device AI technology to the iPhone later this year.

The on-device AI technology is one of the promising segments that can potentially open up new business opportunities. In devising policies for companies like Samsung that are racing to introduce commercial products that incorporate on-device AI solutions, the Science Ministry should consider the fundamental limitations of Korean companies since they depend on the core generative AI technology developed and run by US tech firms such as OpenAI, Microsoft and Google.

Even the hardware manufacturing of semiconductors, where Korean chipmakers are frontrunners, is now set to undergo a whirlwind of dramatic changes, posing more challenges ahead. Last week, it was reported that OpenAI chief Altman was in talks with potential investors including the United Arab Emirates government to raise up to $7 trillion.

Altman is reportedly seeking to design and produce AI chips that can power the development of human-like AI, known as artificial general intelligence, and at the same time resolve the chronic shortage of graphics-processing units, or GPUs, which are in high demand for AI solutions worldwide. If realized, Altman’s plan will result in new factories in over ten locations worldwide, reshaping the global chip and AI industries in general.

Against this backdrop, the Korean government should devote its policy focus to ensuring that corporate technological innovation take precedence, removing regulatory obstacles wherever necessary and nurturing a solid AI ecosystem. These tasks are easier said than done. The Science Ministry, therefore, should narrow down its key objectives and arrange policy resources to more urgent issues such as the lack of skilled AI developers.