South Korea to launch $3.5 billion frontier AI push in March 2027, opening the contest to startups, universities and researchers

South Korea will launch a 4.7 trillion won ($3.5 billion) program to build a frontier AI model from March 2027, the Ministry of Science and ICT said on October 6, with a lead developer to be chosen through an open tender once parliament approves the 2027 budget in December.

The investment comes as governments and technology companies around the world intensify efforts to develop increasingly capable artificial intelligence systems. For South Korea, the programme is intended to strengthen domestic capabilities and give local companies, researchers and institutions a larger role in the development of frontier technology.

How the AI model developer will be selected

The Ministry of Science and ICT plans to select a lead developer through a competitive tender. The process is tied to parliamentary approval of South Korea’s 2027 budget, which is expected in December.

Following budget approval, the government could select the winning developer as early as February 2027, ahead of the planned March launch of the programme.

The competitive process is designed to open participation to a broad range of organisations. According to the ministry, eligible participants could include individual companies, consortiums and special-purpose vehicles.

That structure could allow startups and established firms to compete alongside universities and individual researchers. Rather than restricting the project to a single type of organisation, the government says it wants to create opportunities for different groups to take leading roles in developing the AI model.

The approach also places emphasis on assembling the resources required for frontier AI development. Computing capacity, data and specialised talent are expected to be concentrated on the selected project as the government seeks to achieve leading performance.

AI model project will run separately from existing programme

The new AI model initiative will operate separately from South Korea’s existing home-grown foundation model programme, according to the science ministry.

That programme will continue while the government moves forward with the larger frontier AI effort. Two final teams are scheduled to be selected during a third-stage review in February 2027.

The separation of the programmes indicates that Seoul intends to pursue multiple approaches to expanding its domestic artificial intelligence capabilities. While the existing foundation model initiative will continue its development and selection process, the new programme will focus specifically on creating a frontier AI model with leading performance.

Maintaining both efforts could give companies, universities and researchers opportunities to participate in different areas of South Korea’s AI strategy while the government continues to build domestic expertise.

South Korea expands its AI ambitions

The AI model programme is part of a broader effort by South Korea to compete in a technology sector increasingly shaped by access to advanced computing, data and highly skilled researchers.

With 4.7 trillion won allocated to the initiative, the government is placing substantial financial resources behind its objective. The planned combination of state equity investment and private funding is intended to support development at a scale that can compete with leading international efforts.

The decision to use a competitive tender also leaves open the possibility that a range of domestic organisations could lead the project. Startups, major companies, universities and researchers will have opportunities to participate, either independently or through consortiums and special-purpose vehicles.

The timeline now depends on the approval of the 2027 budget in December and the subsequent tender process. If the schedule proceeds as planned, a lead developer could be selected in February, with the AI model programme beginning in March 2027.

For South Korea, the initiative marks a significant expansion of government support for frontier artificial intelligence. The combination of public investment, private capital, computing chips, data and talent will form the foundation of the effort as Seoul seeks a stronger position in the global AI competition.