Vice Minister Ryu Je-myung of the Ministry of Science and ICT met with officials from domestic startups and investment firms to discuss the direction of advancement for artificial intelligence (AI) industry promotion. Since taking office on June 30, Vice Minister Ryu has been conducting field meetings to realize the government's goal of becoming one of the top three AI nations.
On the 21st, Vice Minister Ryu noted at the 'AI Startup Investment and Support Activation Meeting' held at the HJ Business Center in Gwanghwamun, Seoul, that the government would policy-wise support AI startups to enable diverse attempts. He added, 'We will work on measures to ensure that a virtuous cycle system is well established throughout the country, akin to supplying the blood needed for growth.'
At this meeting, founders of startups that secured early investments, including Defly (AI-based sound detection and analysis), ZETIK AI (AI on-device), Metafactory Corporation (AI-based 3D content creation), TripBitos (mydata and AI-based travel support), Glorank (AI-based education solution), and Flitto (real-time AI translation and interpretation), attended to share the difficulties they experience and suggest required policy support.
In the private investment sector, executives from Quantum Ventures Korea, DSC Investment, and Y&Archer were present, along with officials from public investment-related organizations such as the National IT Industry Promotion Agency (NIPA), Korea Venture Investment Corporation, Korea Artificial Intelligence Software Industry Association, and Korea Communications Operators Association.
According to the Ministry of Small and Medium-sized Enterprises and Startups, the scale of investment executed in the domestic AI sector last year was approximately 900 billion won. While the investment scale in the venture investment sector is rapidly increasing, it remains at only 1/150th of that in the United States.
Lee Dong-woo, executive director of Quantum Ventures Korea, said that in order to narrow the gap between the United States and the private investment market, proactive government-led support for AI investment activation, similar to that of China, is essential. He noted that methods to support the nurturing of startups indirectly, along with the government's AI and deep-tech data enhancement, should also be established.
Hwang Tae-il, CEO of Glorank, pointed out the lack of 'evaluation metrics' as a challenge faced by AI startups in attracting investment. He stated, 'In the platform industry, metrics that serve as investment criteria, such as repurchase rates, user acquisition costs, and average revenue per user (ARPU), are relatively clear. However, despite the dawn of the AI era, there are no new evaluation metrics specifying AI services, which is a challenge.' He expressed hope for the establishment of new evaluation metrics suitable for the AI era on a national level.
Kim Yeon-seok, CEO of ZETIK AI, mentioned the need to address the lack of 'adventurousness' in the domestic investment atmosphere. He remarked, 'Based on Korean investment standards, they would never have invested in OpenAI, the developer of ChatGPT.' OpenAI reportedly recorded $3.7 billion in revenue last year, more than double the previous year's revenue, but is estimated to have incurred a loss of around $5 billion. He explained that under such performance structure, it is unlikely that they would receive investments in the domestic market. Kim emphasized that funds contributed by the state do not venture into new businesses, insisting that this atmosphere needs to change.
Vice Minister Ryu stated, 'As both the public and private sectors recognize the necessity of expanding AI investments, I expect that various direct and indirect investments will increase and the related market will also expand.' He added, 'The government will also work to provide investment incentives in cooperation with the private sector while striving to enhance the support system for AI startups based on the voices from the field.'