[Market Pulse] The Future of Korean AI Semiconductors Shown by FuriosaAI

FuriosaAI, an artificial intelligence (AI) semiconductor company, announced on July 22 that its second-generation AI inference accelerator, Renegade (RNGD), has been fully adopted for LG's large language model (LLM), EXAONE. FuriosaAI and LG AI Research applied Renegade to the pilot environment of the EXAONE 3.5 model and conducted intensive testing for about eight months. As a result, they were able to reduce the excessive power consumption issue of traditional graphics processing units (GPUs) by 2.25 times, while still meeting the specifications required for large-scale generative AI services.

LG and FuriosaAI, a startup, plan to collaborate on an enterprise on-premises (installed and operated on internal company servers, as opposed to the cloud) turnkey solution called the 'EXAONE AI Solution,' based on Renegade. Once commercialized, FuriosaAI's products could be expanded and applied to a variety of companies beyond LG affiliates.

This collaboration between FuriosaAI and LG carries significant implications for South Korea's AI ecosystem. First, it is a highly meaningful example of breaking NVIDIA's long-standing monopoly on GPUs within the AI ecosystem. To elaborate, FuriosaAI replaced the NVIDIA ecosystem's Tensor Core, which plays a crucial role in AI-dedicated computing, with its own proprietary Tensor Contraction Processor.

Building Korean Technology Infrastructure Free from NVIDIA GPU Dependence

Given that NVIDIA's Tensor Core has been a critical catalyst for AI-dedicated computing, the fact that FuriosaAI's Neural Processing Unit (NPU) is replacing NVIDIA's Tensor Core in its collaboration with LG marks an important milestone in enhancing the competitiveness of South Korea's AI semiconductor industry.

Second, if the company can successfully provide enterprise on-premises AI solution models, it could reduce dependence on NVIDIA's GPUs and enable the construction of AI infrastructure using Korean technology, especially at a time when countries around the world are focusing on securing sovereign AI. This also brightens the prospects for exports related to the AI industry.

FuriosaAI came into the public eye this March when it turned down a 1 trillion won acquisition offer from Meta. I first encountered FuriosaAI during my tenure as Minister of SMEs and Startups, through a system semiconductor startup incubation program run in collaboration with global semiconductor design company ARM. As I described in my book "Semiconductor Sovereign Nation," in April 2020, the Ministry of SMEs and Startups and ARM signed a joint agreement allowing companies to develop their first prototypes without paying for intellectual property (IP) during the initial product development phase. The program jointly supported a total budget of 4 billion won for 48 companies over four years.

4 Billion Won in Seed Funding Leads to 1 Trillion Won in Value

Startups such as FuriosaAI, DeepX, and Rebellions received support from this program. At the time, the average research and development (R&D) budget provided to each company was about 200 million won. It is truly gratifying that this seed funding helped create a company valued at 1 trillion won in just five years. After this project's success with the Ministry of SMEs and Startups, ARM sought my prior consent as the originator of the idea to launch similar projects with other countries.

Before starting this project with ARM, I also sounded out Samsung Electronics and SK hynix, but did not receive a positive response. Recently, an executive at Samsung Electronics told me, "When you suggested it, we should have been more proactive and taken on the challenge of collaborating with startups." I still regret that point to this day.

It is extremely important for large Korean companies to build ecosystems through collaborative division of labor with startups. Especially in the rapidly evolving and volatile AI era, flexible communication through horizontal and collaborative partnerships often provides a decisive opportunity to recognize and develop new fields. The government's role in creating the right environment and facilitating such communication is also crucial. Therefore, I hope the government's role as a bridge connecting large corporations, SMEs, and startups will be further strengthened.

Park Youngsun, former Minister of SMEs and Startups