[Drifting Korean-style AI] ⑤ Only Sovereign AI Survives... Local Champions Succeed Globally

Naver Expands Connections with Saudi, Philippine, and German Companies
CEO Choi Soo-yeon: "Plans to Expand Global Sovereign AI Ecosystem"
Developing Proprietary AI Models in France, China, Finland, India, and More

[Image source=Yonhap News]

Naver's strategy to survive the artificial intelligence (AI) supremacy war is sovereign AI. This is a kind of niche strategy to build an AI environment that is not dependent on the U.S. big tech companies dominating the global market. However, since the sovereign AI strategy is still in its early stages, it is generally agreed that visible results are unlikely in the short term. From Naver's perspective, building endurance to sustain over the long term is crucial.

According to industry sources on the 21st, Naver recently met with German telecommunications company Deutsche Telekom at its headquarters to discuss sovereign AI and other topics. It is known that Kim Yoo-won, CEO of Naver Cloud, and Seok Sang-ok, CEO of Naver Labs, met with representatives from Deutsche Telekom.

Deutsche Telekom also visited Naver's headquarters in October last year. At that time, they discussed cloud technology along with sovereign AI. Although it did not lead to specific contracts or memorandums of understanding (MOUs), it is increasing points of contact with global companies.

Sovereign AI is a compound of "sovereign," meaning autonomy, and AI, referring to artificial intelligence, meaning "AI with sovereignty" or "AI sovereignty." It originates from concerns about the spread of AI developed primarily in the U.S., which is familiar with American language and culture. For example, big tech AI labeling the East Sea as the Sea of Japan reflects AI models that do not understand the unique culture, systems, or language of a particular country or society, resulting in biased and inappropriate responses. Consequently, there is a growing movement to seek cooperation with companies emphasizing sovereign AI to introduce AI models that learn and actively reflect their own country's culture.

Countries including South Korea, China, France, Taiwan, and Singapore are developing independent AI capabilities using their own infrastructure and data. Representative examples include Le Chat from French AI company Mistral, Kimi from China's Moonshot AI, Viking from Finland's Silo AI, and Krutrim from India's Krutrim. This is a similar strategy to Naver's pursuit of global expansion through its large language model (LLM), HyperCLOVA X.

Kim Jin-hyung, emeritus professor of computer science at KAIST, said, "Based on Naver's experience developing LLMs, it seems they believe it is possible to create AI tailored to Middle Eastern or Southeast Asian languages and conduct business through it."

Naver is strengthening sovereign AI because it offers opportunities for global expansion. It aims to generate revenue by providing models through collaboration with regions where building independent AI is difficult due to lack of technological capabilities. Countries and companies that want to preserve the uniqueness of their language and culture and actively reflect them in AI models may find Naver's sovereign AI strategy attractive. Targets could include countries and companies in the Middle East, ASEAN, some European countries, and South America. If Naver builds AI models and infrastructure in these places and receives compensation, it could exert some influence within the AI industry structure dominated by U.S. big tech. Some also suggest that as the importance of domestic AI models grows, it may become easier to receive government support.

Previously, Naver has shown moves related to sovereign AI by signing MOUs with companies in Saudi Arabia and the Philippines. In March, it signed an MOU with Aramco Digital, a subsidiary of Saudi Aramco, to promote the development of Arabic LLM-based sovereign AI. In May, it signed an agreement with Philippine internet service provider Converge ICT Solutions to promote the Philippines' digital transformation using sovereign cloud and AI.

Lee Hae-jin, Naver's Global Investment Officer (GIO), met with Jensen Huang, CEO of NVIDIA, to discuss the importance of sovereign AI and ways to build AI models. Last month, at the Jeju Forum hosted by the Korea Chamber of Commerce and Industry, Naver CEO Choi Soo-yeon said, "Based on our experience and know-how in developing native language-centered models, we want to support many countries around the world in securing sovereign AI," adding, "We plan to expand the global sovereign AI ecosystem by building cooperation with companies sharing common goals in various areas such as AI infrastructure, data, and services."

The key lies in how much the influence of big tech companies such as OpenAI, Google, and Microsoft (MS) can be restrained. For companies promoting sovereign AI, the relentless offensive from big tech is a burden. According to data from British data analytics company Tortoise Intelligence, the country with the highest AI level last year was the United States, followed by China, Singapore, the United Kingdom, and Canada, with South Korea ranking sixth. Detailed data showed limitations in talent (12th), operational environment (11th), research level (12th), and private investment (18th), indicating constraints in manpower, systems, and investment needed to lead AI growth and diffusion.

The AI Basic Act to support the domestic AI industry has yet to pass the National Assembly. Since it may take a long time to enact, the industry argues that at least a bill containing industrial promotion measures should be processed first. In Canada, direct support for AI promotion is gaining momentum, such as investing 2 trillion won in computing infrastructure.

An industry official said, "If Korea relies on AI based on English, it will face the future using AI with lower performance than other countries due to language barriers," adding, "If Naver leads sovereign AI, it will change search engines and mobile interfaces, and further expand into robots, resulting in enormous economic benefits."