South Korea Artificial Intelligence Market Growth Analysis - Forecast Trends and Outlook (2025-2034)

The South Korea artificial intelligence market reached a value of nearly USD 1.18 billion in 2024 . It is projected to grow at a CAGR of 15.60% between 2025 and 2034 and reach around USD 5.05 billion by 2034 .

South Korea Artificial Intelligence Market Growth Rate

The South Korean government is adopting AI-based industrial intelligence across all manufacturing sectors. The government also aims to have self-driving cars in the country by 2027 and to make it the first in the world to have self-driving cars on major streets. To meet this goal, the country’s government and Hyundai Motor Group plan to invest more than USD 50 billion in the South Korea self-driving car market by 2025.

Some of the factors driving the South Korea artificial intelligence market growth are the introduction of government initiatives aimed at driving technological advancements and the emergence of AI-focused startups or scaleups. Cities such as Seoul, Busan, Gwangju, and Pangyo have emerged as leading AI hubs, which aid in promoting the development and use of the technology. By 2027, KT Corporation, the second-biggest mobile carrier in Korea, plans to invest USD 1.2 billion in its AI and robotics business.

Key Trends and Developments

Rising industrial manufacturing activities; favourable government initiatives; technological advancements; and growing automotive production are favouring the South Korea artificial intelligence market expansion

April 2024

Samsung Electronics unveiled its 2024 line of Bespoke AI home appliances, aiming to lead in AI home technology. The 2024 Bespoke AI Hybrid refrigerator featured AI hybrid cooling technology, using a machine learning model to predict and control temperature fluctuations.

April 2024

Samsung Electronics accelerated its global semiconductor supply chain expansion with a USD 6.4 billion subsidy from the U.S. government under the 2022 CHIPS and Science Act. This funding aimed to bolster U.S. semiconductor production to 20% of the world's leading-edge chips by 2030.

April 2024

SK Telecom announced the release of a telco-specific large language model (LLM) in June, tailored to telecommunications companies' needs. The LLM was fine-tuned on SK Telecom's AI model, A.X, and other models like OpenAI's GPT and Anthropic's Claude. It aimed to enhance global telcos' operations, including customer centres, network infrastructure, and wireless plan recommendations.

October 2023

KT Corp, South Korea's top mobile carrier, launched Mi:dm, a large AI model with 200 billion parameters, aiming to expand its AI business across various sectors globally. The model, trained on over 1 trillion tokens, offers four versions catering to different needs, from basic to expert.

Growth in Industrial Manufacturing

As of December 2023, manufacturing accounted for 25.5% of the Korean GDP. By deploying predictive analytics and machine learning algorithms, AI helps manufacturing businesses, including automotive producers, to proactively monitor and anticipate equipment failures, reducing downtime.

South Korea is a Significant Producer of AI Chips

In 2022, South Korea held 17.7% of the global semiconductor market share and was the 2nd largest chip producer globally. By 2030, the government aims to invest USD 850 million to aid the production of AI chips.

Growing Government Investments in AI

The South Korean government has announced multiple investments and provides AI startups with grants and tax benefits to aid their growth. For instance, in April 2024, the South Korean government announced an investment of USD 6.94 billion by 2027 in artificial intelligence to maintain its leading position in cutting-edge semiconductor chips, globally.

Advancements in AI Technology

Advancements in technologies like machine learning allow AI systems to make accurate and complex decisions based on a thorough analysis of large volumes of data. Advancements such as Deep Learning, Natural Language Processing (NLP), and Generative Adversarial Networks (GANs) support the market growth.

Rising Automotive Production

In the automotive sector, AI helps companies improve the quality and efficiency of production processes, reduce waste, and assist with innovation. As of April 2021, South Korea was the 5th largest automotive producer globally. In 2023, it produced around 4.2 million vehicle units.

South Korea Artificial Intelligence Market Trends

The South Korean healthcare landscape is increasingly open to adopting health IT. All tertiary hospitals in the country use EMR systems to digitise patient data and store clinical images digitally, which are further analysed by AI. The government also plans to establish 18 smart hospitals by 2025, offering further opportunities to the South Korea artificial intelligence market.

Furthermore, in the manufacturing sector, the South Korean government aims to prioritise the use of AI-based industrial intelligence. By 2030, it aims to develop over 2,000 AI-based factories. As of May 2024, South Korea has 1,101 artificial intelligence startups. These companies collaborate with companies in the academic, research, and industrial sectors to develop and push the boundaries of AI technology. Key AI startups in South Korea include Krafton, Mathpresso, Zig Zag, Lunit, and Channel Talk.

Figure: Production of Cars and Commercial Vehicles in South Korea, 2018-2024 (Units)

South Korea Artificial Intelligence Industry Segmentation

The report titled “South Korea Artificial Intelligence Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Product and Service

• Hardware
• Software
• Service

Market Breakup by Technology

• Machine Learning
• Natural Language Processing

Market Breakup by End Use

• Security
• Media and Advertising
• Retail
• Automotive
• Healthcare
• Manufacturing
• BFSI
• Professional Services
• Others

South Korea Artificial Intelligence Market Share

Services are expected to hold a significant market share as the government is providing AI vouchers to SMEs and start-ups that require AI-powered services

Artificial intelligence as a service allows individuals and companies to outsource AI capabilities to a third party. This enables them to experiment with AI for various purposes without requiring a large initial investment. Some of the companies providing AI services in South Korea include Kakao Brain and Naver Corporation.

South Korea is among the few countries that develop high-end semiconductor devices needed for AI development on a global scale. In April 2024, the South Korean government unveiled plans to offer financial support to local semiconductor efforts, including the formation of a USD 1 billion fund to help innovative AI chipmakers expand. By 2027, the country aims to invest USD 6.8 million to boost the country’s AI chip sector.

Companies across South Korea are adopting AI to accelerate digital transformation efforts by increasing task automation and reducing costs. In March 2024, the South Korean government announced its plan to invest USD 585 million in domestic AI research and development to strengthen its industrial competitiveness.

South Korea Artificial Intelligence Market Leaders

Samsung Electronics Co. Ltd

Headquartered in South Korea and founded in 1969, Samsung Electronics Co. Ltd offers artificial intelligence products and services through the integration and utilisation of different product categories that include memory, processor, and consumer electronics.

SK Telecom Co., Ltd.

Headquartered in South Korea and founded in 1984, SK Telecom Co., Ltd. provides AI services that include the Korean Large Language Model (LLM) offering services to AI Phones, AI Music, and AI sleep management as well as AIX and AI infrastructure. By integrating AI with 5G and other technologies, SK Telecom aims to lead as a global AI company, driving innovation and contributing to social and economic development.

KT Corporation

Headquartered in South Korea and founded in 1981, KT Corporation is a leading integrated telecommunications and platform service provider that aims to transform into an AI-driven ICT company. The company offers Artificial Intelligence integration products and services such as Data services, Voice traffic wholesale services, and Consulting services for operations.

LG Corporation

Headquartered in South Korea and founded in 1958, LG Corporation offers artificial intelligence products and services that include LG AI research, LG Electronics such as LG ThinQ, lines of consumer electronics equipped with AI technology, LG Innotek, and LG CNS.

Other key players in the South Korea artificial intelligence market include Kakao Enterprise Co. Ltd, Microsoft Corporation, Amazon Web Services, Inc., Google LLC, and Riiid, Inc., among others.