Startup Ministry lays out plan to spur $722 million in AI investment

Industry

Startup Ministry lays out plan to spur $722 million in AI investment

Published: 10 Jul. 2024, 18:04 Updated: 10 Jul. 2024, 19:31

LEE JAE-LIM
lee.jaelim@joongang.co.kr

Minister of SMEs and Startups Oh Young-ju outlines the ministry's plans to support domestic AI startups and stimulate investment at a press briefing held in southern Seoul on Wednesday. [MINISTRY OF SMES AND STARTUPS]

The Ministry of SMEs and Startups plans to ramp up AI investments to 1 trillion won ($722 million) by 2027 by stimulating contributions from both the private and public sectors to boost the nation’s capabilities in the burgeoning technology.

The ministry announced a road map on Wednesday to support domestic AI startups across five areas with foreseeable growth, with the additional goal of nurturing three AI unicorn companies by 2027.

“We plan to concentrate focus on companies involved in small language models, which target specific industries for market opportunities, as well as on AI chip designers,” SME Minister Oh Young-ju said at a press briefing in southern Seoul. “Moreover, we will actively nurture AI startups in three promising sectors: manufacturing, healthcare and content, where many of our companies currently lack global presence.”

The overall road map involves stimulating the domestic market, propelling the expansion of domestic AI startups in the global market, nurturing AI experts and establishing AI governance for large and small enterprises actively involved in the sector.

For global expansion, the ministry will establish overseas venture capital investment funds interested in Korean AI startups, and provide networking events to connect the companies with foreign investors.

A majority of the policies are set to begin next year, but the ministry’s “on-device AI challenge,” a project to deploy the creative technologies of AI startups in the smart devices of conglomerates such as LG Electronics, kicked off in March.

The technology of the 10 innovative startups that were hand-picked for the initiative out of more than 1,000 applicants will be adapted for LG Electronics’ upcoming notebook series. The companies are Prairie Schooner, FromD, Re:Peach, Invaiz, Neutune, Gamba Labs, Nation A, Circulus, ALI and Clika.

As a result, Prairie Schooner’s AI-powered voice recognition and voice assistant or Nation A’s videoconferencing solution utilizing AI-generated 3-D imaging may be incorporated into next lineup of LG notebooks.

The startups’ technologies are at the proof-of-concept stage, but specific plans for deployment have not yet been set.

Adopting generative AI by the workforce is projected to drive the global GDP up 7 percent, or nearly $7 trillion, over the next decade, according to Goldman Sachs data in 2023.

The size of the AI market worldwide is expected to grow 36 percent annually until 2030, far higher than the annual 15 percent growth trajectory anticipated for Korea, according to data from the International Data Corporation Korea.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]