[K-Women Talk] The DeepSeek Shock: What It Takes for Innovation in the Digital Sector

China's Low-Cost AI DeepSeek Succeeds
Expanding the Possibility That "South Korea Can Do It Too"
Urgent Need for Talent Development and Work Hour Reform

The news that garnered the most attention during this Lunar New Year holiday was the China-originated DeepSeek. Released on January 20, DeepSeek was announced to have a model training cost of $5,576,000 (approximately 8 billion KRW), which is only 1/18th of the estimated development cost of OpenAI's GPT-4 and 1/10th of Meta's LLaMA 3 development cost. Although there are suspicions that the cost might have been underreported, the long-held assumption that massive costs and high-performance computer systems are prerequisites for AI development has been shattered. In the U.S., DeepSeek's emergence is being called an "AI Sputnik Moment." Just as the U.S. and the Soviet Union once competed fiercely in aerospace, the AI field?previously dominated by American big tech companies?is expected to see intensified competition between the U.S. and China.

The AI model R1 developed by DeepSeek is creating various stories starting from its development team. It is notable that the achievement was made solely by domestic Chinese researchers who have not studied abroad in the U.S. in their 20s, and the story of founder Liang Yuanfeng from Guangdong Province, who achieved tremendous success in AI technology at a young age, is fresh and inspiring. Additionally, the fact that the developed AI model was released as open source has also become a hot topic. Although government agencies have banned the use of DeepSeek due to concerns over personal data leaks and security issues, the achievements of DeepSeek have provided a significant stimulus to South Korea. Until now, AI development was assumed to require enormous costs, but since it has been proven that high-performance AI can be developed with lower costs and less data, it greatly expands the possibility that "we can do it too."

However, having only the possibility of "we can do it" does not guarantee actual results. To avoid falling behind in the global AI competition, the most important factor for South Korea will be securing excellent AI professionals. Currently, South Korea is evaluated to have a severe shortage of AI experts compared to the U.S. and China. Considering that the key developers at DeepSeek are young talents who recently graduated from university, South Korea must actively engage in nurturing and training personnel in this field starting now.

Another important factor is creating an environment where people can work freely. In this regard, the recent controversy over the exemption from the 52-hour workweek during the semiconductor special law discussions must be urgently resolved. Rather than limiting exceptions to the semiconductor sector, it would be advisable to refer to the autonomous work hour decisions for high earners adopted by other advanced countries. For example, the U.S. and Japan have white-collar exemption systems where high earners above a certain salary threshold (e.g., $107,432 annually in the U.S., 10.75 million yen in Japan) are exempt from work hour regulations.

Currently, South Korea's Labor Standards Act provisions related to working hours are all criminally punishable if violated. Even if labor and management autonomously decide, the state intervenes with criminal penalties if the law is broken. Generally, penalties should balance the protected legal interests and the means of punishment, but applying work hour regulations originally designed for manufacturing industries to the increasingly diverse work patterns today can lead to unfair situations. Workers prefer to work intensively and rest intensively, and if sufficient monetary compensation is provided for overtime, is it appropriate for the state to uniformly impose criminal penalties for legal violations in a digital world that demands great diversity and flexibility? It is time for institutional improvements suited to the AI era.

Kim Kyung-sun, Former Vice Minister of Gender Equality and Family