The public sector artificial intelligence (AI) market has grown rapidly to an annual scale of 3 trillion won.
The Software Policy and Research Institute said on the 10th that in the study "2025 public sector artificial intelligence (AI) adoption status," AI contracts increased from 221 in 2015 to 1,215 in 2024, nearly 5.5 times, and over the same period the amount rose 11.5 times from 244.3 billion won to 2.8207 trillion won. As of 2024, public sector AI contracts account for 2.2% of all information and communications technology (ICT) service contracts by number and 11.78% by amount.
From 2015 to 2024, the number of AI adoption contracts among public sector procurement contracts is 6,975. Of the 412 public institutions surveyed, 268, or 65%, adopted AI. The Software Policy and Research Institute explained that many of those surveyed are small institutions without their own ICT systems, and excluding them would significantly raise the effective adoption rate among public institutions.
The AI technologies introduced have also evolved. In the early days, simple functions centered on optical character recognition (OCR) and text-to-speech (TTS) dominated, but applications of machine learning and Deep Learning surged starting in 2017. As of 2024, chatbot applications totaled 325, machine learning 208, and Deep Learning 176.
However, behind the market expansion, demand is still concentrated in a few central ministries and large projects.
In fact, the average contract amount per project was 2.05 billion won for national institutions and 2.33 billion won for quasi-government institutions, while local governments were at 1.08 billion won. In particular, for local governments, maintenance of existing systems accounted for 48.6% of AI-related projects.
Polarization among suppliers was also significant. Although small and medium-sized enterprises won 87.6% of all contracts by number, the average amount per contract was 1.2 billion won. In contrast, for 25 large corporations, the average amount per contract won was 11 billion won.
The shift to Generative AI is still slow. In 2023–2024, after the emergence of ChatGPT, there were a total of 66 public sector Generative AI adoption contracts. As of 2024, Generative AI accounts for 3.5% of all AI contracts.
The Software Policy and Research Institute said, "In line with the characteristics of Generative AI, there will be more projects that use large language models (LLMs) to generate new content such as text, images, and code, or perform advanced reasoning and transformation tasks."