Is South Korea’s AI Dream at Risk? Experts Weigh In on US Moves

As US President Donald Trump unveiled an “AI action plan” last week aimed at maintaining America’s dominance in artificial intelligence, concerns are growing that the move could undermine South Korea’s ambitions to build its own sovereign AI ecosystem.

Industry sources reported Wednesday that the Trump administration’s plan, signed on July 23, triggered a swift response from China, which announced its own global AI governance initiative just three days later.

At the core of the US plan is a push to develop and export a comprehensive AI package — including high-performance GPUs, servers, software, and foundation models — designed to encourage allied nations to adopt US AI technologies and standards.

Korean experts caution that this could pose a significant challenge to Seoul’s sovereign AI strategy, which aims to develop a national foundation model capable of matching at least 95 percent of the performance of global leading models.

The Lee Jae Myung administration is currently running a competitive selection process to identify “national representative AI teams,” with up to 240 billion KRW (180 million USD) in funding earmarked for the winners.

A recent report by the Korea AI Software Industry Association (KOSA) warned that “the US AI action plan could become a roadblock to Korea’s AI self-reliance,” highlighting the risk of domestic firms being relegated to downstream roles, such as app development, within a US-dominated AI platform ecosystem.

“If key AI models and platforms are controlled by the US, Korean companies may find themselves merely feeding applications into foreign ecosystems,” the KOSA report stated.

In response, the Ministry of Science and ICT emphasized that accelerating the development of domestic foundation models and securing critical resources such as AI talent and GPU computing power are essential countermeasures to the evolving global landscape.

“Swiftly completing our sovereign AI ecosystem is our best defense,” a ministry official stated. “We will fine-tune our strategy based on the capabilities of the selected national AI teams.”

President Trump’s recent remarks advocating for looser AI regulations are also expected to impact Korea’s implementation of its AI Framework Act.

Korea became the world’s second country, after the European Union, to pass comprehensive AI legislation, set to take effect next year.

While some industry insiders suggest that Korean startups could benefit from narrowing the tech gap by leveraging US-promoted open-source models, they also warn that such dependency could leave Korea vulnerable to future geopolitical and technological shifts.

“We can’t ignore the efficiency of using certain US technologies,” an industry source, speaking on condition of anonymity, told us. “But to mitigate external vulnerabilities, Korea must acquire the full spectrum of capabilities needed for AI sovereignty — from models to infrastructure and platforms. Striking a balance between national independence and global collaboration will be crucial for Korea’s future AI policy.”

Experts also stress the need for diplomatic finesse in minimizing potential conflicts around AI governance while safeguarding Korea’s technological sovereignty.

“A two-pronged approach may be necessary,” said Lee Jae-sung, professor of AI at Chung-Ang University.

“Initially, leveraging open-source tools can help close the gap with big tech. But in the long run, we need to transition to homegrown solutions and build an independent AI foundation.”