The government released on the 10th an industry restructuring plan to achieve "No. 2 in the world in semiconductors," based on the judgment that it is also feasible to leap into the "AI big three." While Korea falls short of the United States and China, it is seen as holding an edge within the third-place group. Lee Jae-myung, just over six months into office, has met in succession with heads of global corporations such as BlackRock, OpenAI, Nvidia and SoftBank as a continuation of that effort. He has said dozens of times that if Korea falls behind in the AI race, the foundation of future growth engines and the nation's fate will be shaken.
On the front line is Ha Jung-woo, the presidential office's senior secretary for AI future planning. It is the most noted newly created position in the new government's presidential office organization. Because it is a specialized technology, it is also the seat that draws the most questions from the president. In Yongsan, there is even a joke that "the president picked Ha Jung-woo to use him as AI."
In an interview with ChosunBiz that day, Senior Secretary Ha said, "AI is a general-purpose technology like electricity," adding, "When assessing the AI big three, we should not take the approach of 'ChatGPT and Google Gemini do better, so we've fallen behind.'" Instead, he proposed using ▲ the density (intensity) of national AI capabilities and ▲ their absolute scale as benchmarks. He said, "It is different when 1,000 people excel in a country with 10,000 talents versus 1,000 in a country with 100 million. The same goes for the corporations ecosystem," adding, "We must also look at the absolute scale. Only then can we assess capabilities in a multi-dimensional way."
◇ AI strategy committee to release "action plan" for top three within the year
Korea's strength in semiconductors is memory. In contrast, system semiconductors, packaging, materials/components/equipment, and workforce are cited as vulnerable areas. To address this, the government will invest 700 trillion won through 2047 in projects to build domestic semiconductor plants. In particular, it will expand state support to ensure no disruptions in the supply of power and water needed for chip production. It will create special provisions in the Special Act on Semiconductors to include these measures.
What bears watching is the "AI action plan" to be issued by the AI National Strategy Committee under the presidential office. Containing goals and execution measures, it has reportedly completed preparations for "within-the-year release." Divided into three phases, it targets ▲ infrastructure buildup, ▲ AI transformation (AX) across sectors such as industry, culture and defense, and ▲ AI services that all citizens can enjoy. It organizes concrete tasks for relevant ministries, including the Ministry of Trade and Industry (MOTI) and the Ministry of Science and ICT.
Senior Secretary Ha said, "We will announce the action plan within this year in a form the public can see. It is already complete," adding, "It includes all the tasks each ministry must carry out to move us into the AI big three, and detailed timelines of what will be done by when." During discussions, in addition to "standalone third," a plan was reportedly mentioned to form a "top-three alliance" (alliance) with countries at a similar level to Korea—such as the United Kingdom, France, Canada and Singapore. It is a collaboration strategy to counter China.
◇ "Security credibility is AI competitiveness… middle powers will focus on Korea over China"
China's influence in AI is so formidable that the presidential office is considering a "top-three alliance." Beyond differences in market and investment size, there is the practical problem that it is hard to beat China on price competitiveness.
By contrast, Senior Secretary Ha asserted, "We don't have to beat China across the board." Because U.S. hegemony is firm, partners in the global market feel burdened by "overly close alignment" with China, he said. Instead, he said, they cannot help but focus on Korea, which has "overall competitiveness." He called Korea a "rare country" that is broadly equipped across all fields, including energy infrastructure; memory semiconductors; GPU, data center and cloud capabilities; production AI foundational technologies such as large language models (LLMs); and the density and utilization of industrial robots.
He added, "Even if not to the extent of China, Korea, which has competitiveness across the board in AI, can be a good partner for middle powers." He also said, "The United States and China tend to make things themselves and do everything through to export, but we can grow side by side by making things together with the third-place group," adding, "Among the third-place countries, it is in fact only Korea that has everything from energy infrastructure to industrial robot capabilities."
He especially judged that trust in "security" will offset price competitiveness. Senior Secretary Ha said, "Even if China supplies a 100-point AI for 100 won and Korea supplies a 90-point one for 110–120 won, many countries may choose a 'predictable partner.'" He continued, "Because AI is linked to security, if performance and price gaps are within tolerable ranges, it is a hurdle we can clear," adding, "The ultimate goal is to surpass China, but if we can't, does that mean we have no opportunities? No, it does not."
◇ Early next year, results likely from the 'UAE stargate project'
On the occasion of the president's Middle East trip, Korea decided to take part in the UAE Stargate Project. It is a project to build AI infrastructure worth 150 trillion won in Abu Dhabi. It is the largest in the world. In the UAE, state-owned AI company G42 is participating as a key player. The company runs "Khazna Data Centers" and holds more than 70% of the UAE's total data center capacity. The scope and timing of participation by Korean corporations are matters of interest.
Centering on the National AI Strategy Committee, our government is forming with the UAE a working group that includes the Ministry of Science and ICT, the climate ministry, the Ministry of Oceans and Fisheries (MOF), the Ministry of Trade and Industry (MOTI), and private corporations. Senior Secretary Ha said, "By early next year, the Stargate Project should yield concrete results." He said specifics will take shape for state-to-state or corporate consortium formats, as well as each corporation's role and timetable. Considering that mid-December is generally vacation season in the UAE, substantive talks are expected to begin in January next year.
◇ "AI is different from the dot-com bubble… we must take a two-track approach"
As the market heats up, the "bubble" argument has grown. Shortly after U.S. Federal Reserve Governor Lisa Cook mentioned the "possibility of asset price adjustments," former Fed Chair Alan Greenspan's 1996 remark about "irrational exuberance" during the boom was revisited in the U.S. stock market. Four years and three months after that speech, the "dot-com bubble" slammed the U.S. economy and global financial markets. Michael Burry, well known for "shorting Nvidia," also said the AI boom is nothing but a bubble.
How does the presidential office view this bubble argument? Senior Secretary Ha said, "I haven't closely examined how hedging was done back then, but in terms of major corporations' operating margins, steady growth and financial conditions, today is much better." In particular, he said, "The pace at which AI is generating profits now is far faster than the money-making speed before the mobile era," citing analysis by the global investment bank Goldman Sachs as the basis to add, "It does not seem likely to deflate abruptly like the dot-com bubble."
However, he said a government-level "Plan B" is needed. That means analyzing why the bubble argument is being raised and preparing safeguards. Senior Secretary Ha proposed strategies of ▲ prioritizing physical AI to link AI with factories, robots and industrial sites, tying it to productivity in the real economy, and ▲ maximizing collaboration with overseas partners to attract foreign capital and investment and dispersing risk through joint projects with the UAE, among others.
Some have voiced concern that securing 260,000 GPUs has paved the way for Nvidia's dominance. In response, Senior Secretary Ha asked, "Why do you think the United Kingdom was so pleased to secure 120,000 GPUs?" He added, "At this point, how many Nvidia GPUs you can secure is a national-level issue and dilemma," saying, "Because that is difficult, big tech companies are creating alternatives in the form of their own AI Semiconductor chips."
Senior Secretary Ha said, "Google's TPU has emerged to at least 'put up a fight,' but for now it is still hard to conduct AI research, technology development or services without GPUs," adding, "From the standpoint of ensuring immediate livelihoods, we should first secure GPUs, but over the longer term we must take a two-track approach to nurture a homegrown AI Semiconductor ecosystem, including domestic corporations' NPUs and TPUs."