[Click eStock] Five Leading AI Companies Selected as National Representatives, B2G Service Adoption in Focus

With the final selection of five elite teams to participate in South Korea's flagship artificial intelligence (AI) foundation model project, there is growing interest in the potential adoption of related AI models for B2G (business-to-government) services in the future.

On August 5, Choi Seungho, a researcher at DS Investment & Securities, stated, "There is a very high likelihood that 'K-AI' will be adopted in the national defense and public sectors, which are the most sensitive areas in terms of security, and it is also highly probable that the final supply recipients will be among the teams selected this time." He added, "These selected companies are likely to become central players in future national AI projects, which is why they deserve attention. We continue to recommend Naver as our top pick in the internet industry."

The previous day, the Ministry of Science and ICT selected five companies for the independent AI foundation model project. The Ministry selected ▲Naver Cloud ▲Upstage ▲SKT ▲NC AI ▲LG AI Research Institute, making a total of five companies. The selected companies will receive support for data, GPUs (graphics processing units), and personnel costs. Going forward, one team will be eliminated every six months, and by 2027, two final teams will be selected.

Researcher Choi explained, "The significance of this project lies in forming a consortium and being able to participate in future government-led projects." He also said, "The government's ultimate goal is to use the completed models to provide free AI to all citizens and to support public and defense AX (AI transformation)."

He was negative about the potential for B2C (business-to-consumer) service applications. He said, "AI model performance is proportional to capital investment, so it is unlikely that domestic models will be able to close the gap with global leading models in the future," and predicted, "Therefore, even if AI is distributed to all citizens, actual demand will be minimal."

However, he gave a positive assessment regarding B2G (business-to-government) services. Researcher Choi said, "The transition to public and defense AX is likely to generate significant demand," and pointed out, "The main reason for introducing sovereign AI (national sovereignty artificial intelligence) is to secure at least a minimum level of technological and data sovereignty."

Regarding the market size, he emphasized, "Given the public sector's nature, once a software (SW) solution is distributed, continuous revenue can be expected, which is an advantage," adding, "The size of the domestic public sector's SW projects this year amounts to 5.8 trillion won, of which AI accounts for about 180 billion won." He also said, "When sovereign AI is finally selected and fully distributed around 2028, the scale of AI-related projects will expand to the trillion-won level."

Additionally, researcher Choi stated, "Fostering sovereign AI is essential from a national security perspective," and added, "While global leading AI models are likely to be used in most areas, there will be opportunities for domestically developed AI in sensitive sectors such as defense, public, and finance."