Sovereign AI, Please Don't Become the Next Public Certificate [AI Mistake Notes]

WiBro, Public Certificate, Bada OS:
Sovereign AI Must Pursue Independence, Not Isolation
Focus on Ecosystem Building, Not "World's First" or "Homegrown"

Editor's NoteExamining failures is often the shortest path to success. "AI Mistake Notes" explores cases of failure related to AI products, services, companies, and individuals.

There is a five-letter phrase that can instantly frustrate the so-called "digital seniors" who have used Internet Explorer.

Public Certificate

Until the abolition of the public certificate in 2020, it is hard to even imagine how many Koreans were driven to despair by the endless pop-up windows telling them to "install the public certificate." To do internet banking, users had to install all sorts of programs, and even then, installation was rarely easy. If you switched devices, or tried to make a payment or transfer from abroad, the situation got even worse.

The public certificate was a type of "digital signature" necessary for internet environments, and digital signatures themselves are neither unique to Korea nor a local technology?they are international and universal. However, the public certificate had characteristics that clearly set it apart from other countries. It was introduced by the government (through the 1999 Digital Signature Act), was practically mandatory, and had a monopolistic nature that made it difficult for private technologies to enter the market. These factors created what is now called "K-digital signature."

Sovereign AI: How Not to Become the Next Public Certificate

The public certificate was introduced to securely implement internet banking, e-commerce, and e-government in poor internet environments. It cannot be denied that the public certificate has played a role in building e-government and revitalizing domestic internet banking for years. There was a time when many countries around the world flocked to learn about Korea's public certification system and technology. However, users experienced great inconvenience because it was mandatory to install ActiveX or keyboard security programs. The photo shows a public certificate on a bank's online site on the 9th. Photo by Yonhap News

The Sovereign AI boom is underway. "Sovereign" means "autonomous" or "possessing sovereignty." The idea is to create "domestic AI" rather than relying on "foreign AI" like ChatGPT. President Lee Jaemyung emphasized making Korea one of the "top three AI powers" during his presidential campaign and included it as a key pledge. On June 20, he visited IT and AI industry sites, showing deep interest in Sovereign AI. When one attendee stressed the need for Sovereign AI, President Lee responded as follows:

"Some people say, 'Why develop Sovereign AI when we already have ChatGPT? It's a waste of money.' That's like saying, 'Vietnam produces a lot of rice, so why should Korea bother growing rice?'"

This was both an analogy and a message highlighting the importance of Sovereign AI. JP Morgan raised its target price for Naver from 250,000 won to 270,000 won, saying the company would be a major beneficiary of the new government's Sovereign AI strategy. As of June 2, Naver ranked 12th in market capitalization, but by June 23, it had jumped to 5th place. As of the 27th, it had dropped back to 10th, but market expectations remain high.

Of course, Sovereign AI is not exclusive to Naver. Sovereign AI can only be achieved through the integration of many industries, including semiconductors, data, networks, and electricity. This makes it even more important?and something that must not fail. This is why we need to ask questions: Is "our own AI," an "autonomous AI," really the right path?

Since the digital revolution, Korea has made many attempts?some successful, some not?to secure digital sovereignty. Looking back on those experiences may be essential for the success of Sovereign AI. We must not allow a "second public certificate" to happen.

Digital Territories Korea Has Defended: Search, Messenger, Maps, HWP ...

An image digitally depicting Korea and its surroundings. The digits 0 and 1, symbolizing digital technology, surround Korea. Getty Images Bank

There are many cases where Korea has successfully defended its digital sovereignty. KakaoTalk is a prime example. Launched in March 2010, KakaoTalk is now used by almost everyone in Korea. Without KakaoTalk, Koreans would likely be using WhatsApp, Facebook Messenger, WeChat, or similar services.

The search market is similar. Globally, Google dominates, but in Korea, Naver is the leading search engine. This means that Koreans' search history and interests are managed by a Korean company, which is significant for personal data protection and data sovereignty. Last year's "Line Yahoo incident" occurred for this very reason. LINE, developed by Naver, is used by 96 million people in Japan. Japan viewed this as a "loss of data sovereignty."

The document program Hancom Office (HWP) is another example. While Microsoft Word dominates worldwide, HWP remains strong in Korea. HWP is even considered superior to Word in terms of spell checking and complex document editing functions.

In hardware, Samsung's Galaxy smartphones form a duopoly with Apple in the global smartphone market. Samsung Electronics and SK Hynix together hold over 70% of the global DRAM semiconductor market share. In HBM (high-bandwidth memory), a key component in the AI era, SK Hynix has unrivaled competitiveness.

The Light and Shadow of Digital Sovereignty: Consumer Benefits from Competition vs. Galapagos Effect

Galapagos refers to a group of 16 volcanic islands and surrounding reefs in the Pacific Ocean near the equator, located 1000 km away from South America. It describes the phenomenon where technology or services become isolated and deviate from international standards. AP Yonhap News

Monopolies in the market are harmful to consumers. Competition protects consumer interests.

As domestic and foreign products compete, service quality improves and prices go down. According to market research firm Nukeni, out of 36 countries, Korea ranks 10th in terms of iPhone 16 affordability. Although there is criticism in Korea that "Apple is overpricing iPhones," this is only possible because Galaxy remains a strong competitor. Turkey ranked 36th (most expensive), and Brazil 35th. In markets where consumers have no alternatives, it is the suppliers, not the consumers, who hold power.

As shown in the Line Yahoo incident, securing data sovereignty is an invaluable benefit. When domestic companies operate search, email, payment, and messenger services, it minimizes the risk of citizens' data being indiscriminately leaked overseas. This is important not only for personal data protection but also for national security.

Industrial advancement and job creation are also significant. Domestic services and products ensure that spending within Korea translates into profits for Korean companies and is reinvested in the local economy.

These achievements and success stories foster a vibrant startup ecosystem. According to global market research firm CB Insights, as of 2024, Korea has 14 unicorn companies, and the number is growing every year. The sight of Korean IT companies competing with global giants serves as a role model for future generations.

In contrast, Japan has fewer than 10 unicorns. Given the difference in economic scale, the contrast is stark. Japanese corporate culture tends to avoid uncertainty, placing high value on norms and stability. The Nikkei newspaper, in an article titled "Lack of Investment, Unicorn Wasteland," cited the public's reluctance to start new businesses as one reason for Japan's low number of unicorns relative to its economic size.

However, it would be unfair to argue only for the legitimacy and benefits of digital independence. As with the public certificate, inconvenience and losses can occur regardless of good intentions.

HWP is the standard in Korea, but MS Word is the standard overseas. Many people complain about difficulties when collaborating with global companies or studying abroad.

Some markets that are close to monopolies can also weaken competition. If Korea's unique systems drift too far from global standards, there is a risk of becoming an "IT Galapagos." While these systems may be beneficial in the short term, in the long run, they can become obstacles to overseas expansion and international cooperation.

The Lesson of WiBro: The Pitfall of "World's First" and "Homegrown Technology"

WiBro was jointly developed by the Electronics and Telecommunications Research Institute and Samsung Electronics.

Not all of Korea's attempts to secure digital sovereignty have been successful. The most representative case is WiBro. Commercialized in 2006 as the world's first wireless internet service, WiBro was a flagship of Korea's information and communication strategy. It was technologically advanced and even achieved the honor of being adopted as an international standard.

However, with the advent of superior technology like LTE, the service was discontinued in 2018. In the early stages of competition, Korea failed to attract enough partners and countries. Although WiBro was adopted as an international standard, it ultimately failed to build a sustainable ecosystem.

This is similar to Samsung's proprietary smartphone OS, Bada, and smartwatch OS, Tizen. While there was strong will to build independent platforms, it was not enough to compete with the overwhelming ecosystems of Android and iOS. When Bada OS was launched, iOS had 200,000 apps and Android had 70,000, while Bada OS had fewer than 1,000. Developers had little incentive to create apps for Bada OS.

The lesson from these cases is clear: technology alone is not enough. Labels like "world's first" or "pure homegrown technology" may sound good, but they do not guarantee success. WiBro, Bada, and Tizen failed because there were not enough participants. No matter how good a service is, without allies?such as partners and developers?it is impossible to build an ecosystem.

The Path for Sovereign AI: Independence, Not Isolation

An image representing Korea connected to the world through digital signals. Getty Images Bank

The same applies to Sovereign AI. We must not become fixated on concepts like "independence," "sovereignty," or "autonomy." It is essential to attract as many partners, organizations, and countries as possible and build an ecosystem where all participants can coexist. We need to create tools and environments that are easy for developers to use, run development support programs, and help startups create AI-powered services.

No single company or specific enterprise should monopolize the fruits of the ecosystem. If we do not create an environment where multiple domestic companies can compete in good faith, innovation will stall. The government must also play a role in fostering internal competition, rather than supporting only specific companies.

Global compatibility is also crucial. AI should not become something used only in Korea, like HWP. It must be able to integrate naturally with global AI services.

No matter how much money is spent developing Sovereign AI, its use should not be forced or mandated. Before the abolition of the public certificate, the Electronic Transactions Act required the mandatory use of the public certificate for purchases over 300,000 won. Mandatory or compulsory provisions stifle competition and lead to isolated ecosystems. Whether domestic or foreign AI, consumers should have the freedom to choose.

Fortunately, Korea's Sovereign AI efforts show considerable attention to ecosystem building. Naver stated, "Through Sovereign AI, we can build a healthy AI ecosystem in which various countries and companies participate," adding, "Competition and coexistence among diverse stakeholders will accelerate technological innovation and lead to the development of safer and more efficient algorithms, contributing to the long-term and balanced advancement of AI."

Furthermore, there is a clear commitment to ensuring that Sovereign AI does not become "AI for Korea only." Naver emphasized, "It is important that the benefits of AI development are not concentrated in a particular culture or country, but that a healthy AI ecosystem is built with participation from various countries and companies," and added, "Naver's new challenge and mission in the AI era is to create an environment where everyone can equally enjoy the convenience of technology while preserving cultural values and diversity."

Debating the necessity of Sovereign AI is almost a waste of time. The real question is not "why," but "how." Blindly insisting on "our own" is dangerous. As shown by Korea's K-ICT experience, becoming overly focused on "homegrown technology" or "world's first" can lead to being shunned in the global market. Sovereign AI must be about independence, not isolation.