🧠 Food for thought

Implications, context, and why it matters.

Microsoft enters South Korea’s government-backed AI buildout

• Microsoft is joining a South Korean government-backed “sovereign AI” race that seeks a national foundation model, an AI model meant to serve as a base for many applications, built with domestic technology 1.
• Naver, SK Telecom, and LG AI Research already have large language models, AI systems trained to generate and understand text, built for the Korean market 1.
• Naver trained HyperClova X on 6,500 times more Korean data than GPT-4, while SK Telecom said A.X 4.0 scored better than OpenAI’s GPT-4o on local benchmarks 1.

Microsoft’s arrival is reshaping local plans

• Naver and Kakao have faced investor frustration as their shares lagged the market after both said they would not rejoin the government-run sovereign AI foundation model competition once they were dropped from the race 2.
• Naver has shifted from building a Korea-focused sovereign AI model to selling sovereign AI systems in markets such as Thailand and Saudi Arabia 2.
• Local firms are also looking abroad for tech and partners, with Naver’s venture arm D2SF, its startup investment unit, backing Rembrand, a North American AI ad tech startup 3.