South Korea Artificial Intelligence Market Analysis, Size, and Forecast by Type, Deployment Model, Industry, and Organization Size: 2019-2033

South Korea Artificial Intelligence Market Outlook

South Korea is rapidly cementing its position as a global AI powerhouse, backed by a national vision to rank among the top three artificial intelligence leaders by 2027. With nearly $49 billion earmarked for AI development and a regulatory environment designed to promote rather than restrict growth, the country's momentum is no accident. As per David Gomes, Manager – IT, South Korea AI market is expanding at a double-digit CAGR through 2033, driven by strategic investments in AI semiconductors, ethical frameworks, data center cooling technologies, and pharmaceutical R&D powered by machine learning. The government’s hands-off approach compared to the EU AI Act allows startups and enterprises more freedom to innovate while still aligning with high standards for fairness, transparency, and human rights.

At the core of South Korea’s AI transformation lies its 2019 National AI Strategy, which laid the groundwork for critical investments in semiconductor innovation. Flagship companies like Samsung Electronics have taken bold steps to strengthen infrastructure by acquiring Germany-based FlaktGroup for $1.68 billion—a move aimed at enhancing AI-enabled data center cooling capacity. This acquisition complements Samsung’s portfolio of commercial HVAC systems and reflects a trend where traditional electronics giants are repurposing legacy assets to support new AI demands. According to industry executives, the acquisition is a calculated step to capture latent growth in AI-driven infrastructure without overextending capital risk—especially relevant given ongoing economic uncertainty and trade friction with the U.S.

On the governance front, South Korea’s AI regulatory framework remains fragmented but purpose-built. While comprehensive AI legislation is still pending in the National Assembly, ministries such as the Personal Information Protection Commission (PIPC), Financial Services Commission, and Ministry of Culture, Sports and Tourism have rolled out sector-specific guidance. These frameworks emphasize user data protection, copyright compliance for generative AI, and ethical deployment in finance—ensuring guardrails without stifling innovation. In fact, regulations on AI-generated deepfakes introduced under the Public Official Election Act in 2023 are considered among the most proactive globally. Yet, instead of imposing strict controls, policymakers are focused on nurturing growth, especially through public-private collaboration and global alliances.

The emphasis on responsible AI is further illustrated by the 2020 AI Ethical Standards, which codify values like privacy, algorithmic fairness, and explainability. These standards are now embedded in government procurement policies and educational curricula, shaping a generation of engineers and developers to build with accountability in mind. As AI systems scale across public health, defense, finance, and entertainment, these norms help ensure that trust and transparency are not sacrificed in the race for dominance.

In a significant political development, presidential hopeful Han Duck-soo has pledged to create a dedicated AI ministry and a ₩1 trillion ($926 million) innovation fund to accelerate talent development and semiconductor leadership. His proposal reflects the growing consensus among South Korean elites that AI is not just a tech issue but a pillar of national economic strategy. Meanwhile, frontrunner Lee Jae-myung is advocating for a broader vision of AI industry growth alongside K-pop exports and economic recovery—indicating bipartisan recognition of AI’s transformative potential.

On the innovation front, South Korean firms are leveraging AI to transform critical sectors like drug discovery. Drawing from global momentum, companies are slashing pharmaceutical development timelines by integrating AI into clinical trial design, molecular screening, and compound selection. This mirrors trends seen at companies like Pfizer and Merck, whose AI-driven platforms have raised early-phase success rates by over 20%. South Korea’s entrance into this field signals both a catch-up and leapfrog strategy—leveraging domestic research institutions and global partnerships to fast-track breakthroughs in oncology and infectious diseases.

Consumer technology is also evolving with AI at the core. Samsung’s launch of the Galaxy S25 Edge—a 5.8mm-thick flagship smartphone with multimodal AI—highlights how AI is being embedded into everyday devices. This device, capable of interpreting vision and voice input simultaneously, not only represents design innovation but aligns with younger demographics demanding seamless, on-the-go intelligence. With 20% global smartphone market share, Samsung is positioning AI not just as backend infrastructure but as a front-end experience for millions.

Internationally, South Korea is forming new diplomatic and academic bridges to scale its AI ecosystem. The Global AI Frontier Lab launched with NYU in New York, the Seoul Declaration for Safe AI co-hosted with the UK, and the US-Korea AI Working Group all reflect a multi-vector strategy—combining soft power, technical leadership, and regulatory diplomacy. These initiatives underscore South Korea’s ambition to lead AI on its own terms: innovation-forward, ethically grounded, and globally networked.

For businesses, investors, and policymakers, South Korea offers a compelling AI market profile: a government that funds but doesn’t overregulate, corporations that scale responsibly, and a culture increasingly fluent in the language of intelligent systems. With AI embedded in electoral debates, foreign policy, smartphone design, and pharmaceutical R&D, the country is not merely adopting AI—it is integrating it into the fabric of national growth.

Authors: David Gomes (Manager – IT)

*Research Methodology: This report is based on DataCube’s proprietary 3-stage forecasting model, combining primary research, secondary data triangulation, and expert validation. [Learn more]

South Korea Artificial Intelligence Market Scope