Government to Spend 4.7 Trillion Won Next Year in Push for Frontier AI Development

The government will spend 4.7 trillion won to develop a world-class AI model. Frontier AI refers to foundational artificial intelligence models with the highest levels of performance in the world. According to the information and technology industry on the 11th, the Ministry of Science and ICT will launch a 'frontier AI' project separate from the existing independent AI foundation model program, aimed at developing a globally top-tier model starting next year.

The government judged that simply distributing graphics processing units (GPUs) and data across multiple companies would not be enough to catch up with the global leading models, and decided to concentrate large-scale resources on this project. To this end, the government has allocated roughly 4.7 trillion won in its 2027 budget proposal. About 3.9 trillion won will go toward securing 10,000 of Nvidia's next-generation 'Vera Rubin' GPUs, 800 billion won toward purchasing AI training data, and 25 billion won toward recruiting 20 top overseas researchers, with private investment to be drawn in as well.

Deputy Prime Minister and Science and ICT Minister Bae Kyung-hoon distinguished the independent foundation model program as a project for building domestic companies' own AI development capabilities and spreading AI across industries, while positioning frontier AI as an upper-tier challenge aimed at securing world-class reasoning and problem-solving capabilities. The foundation model program will hold its third stage evaluation in February 2027 to select the final two elite teams from among LG AI Research, SK Telecom, and Upstage. The entity to carry out the frontier AI project will be chosen through a separate selection and evaluation process.

However, big tech players such as OpenAI, Google, and Anthropic have already secured massive capital, their own data centers and power infrastructure, and world-class research talent. Their accumulated development expertise and operational experience, built over long years, are also difficult to catch up with in a short time. While the government selects operators and builds computing infrastructure, big tech firms continue to roll out next-generation models and enhance their technological capabilities.

The government itself has acknowledged the limits of competing head-on on capital. Second Vice Science and ICT Minister Ryu Je-myung told a press briefing on the 2nd that aiming to match the level of US big tech is unrealistic. If private investment matching the government's outlay materializes, Ryu said, achieving performance comparable to China's top-tier open AI models could be a realistic goal.

The government's emphasis on setting realistic targets is interpreted as a lesson from the fact that five of the six elite teams participating in the existing foundation model program revised their development goals downward, with the government approving the changes.