[AI Hegemony War Korea's Gamble] AI Advanced Nation or AI Colony... Korea at a Crossroads

"AI as a National Core Industry" Global Hegemony Competition Heats Up
World No.1 Ambition China VS Countering United States
R&D and Investment Lagging Behind in Han... Concerns Over AI Colony

The global power struggle to dominate the artificial intelligence (AI) market is intensifying. China, once a follower, has revealed its ambitions by surpassing the United States in research and development (R&D). The U.S. has also launched efforts to check China’s rise, leveraging its vast capital. South Korea, lagging significantly in R&D and investment, faces threats to its AI sovereignty.

On the 14th, Clarivate, a global academic information service company, analyzed papers in the generative AI field over the past five years (2018?2022) and found China ranked first with 19,318 papers. The U.S. followed with 11,624 papers. Narrowing the focus to recent years, China’s rapid progress stands out. According to Stanford University’s Human-Centered AI Institute (HAI) ‘2023 Global AI Index,’ China accounted for 39.8% of global AI research papers in 2021, overwhelmingly surpassing the U.S. at 10.0%. China has clearly built the foundational strength needed to take the lead in the AI competition.

Recently, China has shown its claws through technology commercialization. In March, Baidu launched its own AI chatbot ‘Ernie Bot’ as a rival to ChatGPT. Alibaba announced in April plans to apply its foundational AI chatbot technology, the massive language model (LLM) ‘Tongyi Qianwen,’ across all its products. Leading Chinese IT companies such as Tencent, Huawei, and ByteDance have all declared their entry into the AI chatbot market. They have also begun creating their own AI ecosystems. Baidu recently established a fund worth 1 billion yuan (about 178.2 billion KRW) to support AI startups, mirroring the U.S. OpenAI’s $100 million (about 127.5 billion KRW) fund established last year to develop ChatGPT.

The U.S. is also fiercely countering China, aiming to widen the gap with its enormous capital. Last year, private investment in AI in the U.S. reached $47.4 billion (about 60 trillion KRW), more than three times China’s $13.4 billion (about 17 trillion KRW). The number of AI companies receiving new investments last year was also higher in the U.S. (542) than in China (160). This is part of efforts to nurture rookies who could become the next Google or Microsoft (MS), leaders in generative AI.

The two countries have also begun distancing themselves. Although the U.S. and China were once the most active collaborators in AI research, cooperation sharply declined from 2021 onward. They have shifted research partnerships to other countries such as the UK, Germany, and Australia. For example, MS relocated its AI research lab (MSRA) from China to Canada under the ‘Vancouver Plan,’ a strategy to prevent talent drain to China, which is desperate to develop its own ChatGPT.

The U.S. and China view AI as a core element of future hegemony competition. Securing the nascent AI industry is essential to guaranteeing future economic resources. Beyond industry, AI can exert powerful influence on security and politics, so both countries are nurturing it as a foundational national industry. China is implementing its master plan, the ‘Next Generation AI Development Plan,’ aiming to become the world’s number one in AI by 2030. The U.S. allocated $1.7 billion (about 2.1675 trillion KRW) to AI last year through the ‘National AI Initiative Act.’ Professor Kim Myung-joo of Seoul Women’s University’s Department of Information Security explained, “As parameters, which determine AI performance, have reached the trillion scale, the capital battle necessary for AI technology development has intensified. It has become a competition at the national level, not just among individuals or companies.”

South Korea is evaluated as lagging behind these countries in AI capabilities. Over the past five years, South Korea ranked fifth with 2,682 papers in generative AI research, about one-sixth the volume of China and the U.S., which ranked first and second. It is not just a matter of quantity. In the top 1% most cited papers, South Korea ranked seventh with 70 papers, far behind the U.S. (691) and China (565). The scale of private investment is similarly small. From 2013 to last year, South Korea’s AI investment totaled $5.57 billion (about 7 trillion KRW), ranking ninth globally and only 2% of the U.S.’s $248.9 billion (about 317 trillion KRW). Last year alone, South Korea’s investment rose to $3.1 billion (about 4 trillion KRW), but it was still only 6% of the U.S.’s $47.36 billion (about 60 trillion KRW).

Given this situation, concerns arise that South Korea could fall behind in competition despite possessing world-class AI technology. Currently, only four countries? the U.S., China, Israel, and South Korea?have independent massive AI models. Companies at the center of this battlefield feel a unique sense of crisis. Just as Google dominates the mobile app market and controls the ecosystem through its fee policies, there is a risk of losing leadership in AI as well. Sung Nak-ho, head of hyperscale AI technology at Naver Cloud, said, “A market worth about 4% of the domestic gross domestic product (GDP) could open up through generative AI. Without proprietary AI technology, we could become an AI colony paying 4% of GDP to external parties.”