South Korea Launches AI Core Development Program to Foster High-Growth Startups

The Ministry of SMEs and Startups (MSS), led by Minister Oh Young-joo, has on February 5, 2025, officially launched the “AI Core Areas and Promising AI Transition (AX) Startup Development Program.” This initiative, part of the broader “Super-Gap Startup 1000+ Project,” aims to cultivate high-growth AI startups capable of integrating advanced technologies across industries and driving economic value in the global market.

A Step Toward AI Industry Leadership

The newly introduced program aligns with the “Super-Gap AI Startup Growth (Level-Up) Strategy” announced last July. As the first initiative to implement this strategy, the program will provide financial and infrastructure support to 20 selected startups specializing in core AI technologies and AI transition.

Program Details and Funding

Under this program, MSS will select:

• 5 high-growth AI startups working in key sectors such as Small Language Models (sLLM), manufacturing AI, bio AI, and content AI. Each will receive up to KRW 150 million for commercialization and access to essential AI infrastructure, including GPU-based computing resources and validation centers.
• 15 AI transition startups focused on applying innovative AI technologies in manufacturing, bio, and content sectors. These companies will collaborate with established enterprises to enhance existing products and services, receiving KRW 80 million in collaboration funds and support for new sales channels.

Startups can apply between February 5 and February 25, 2025. High-performing companies may also qualify for additional funding under the “Super-Gap Startup” initiative, which offers up to KRW 600 million ($414,960 USD) over three years for commercialization and up to KRW 1 billion ($692087 USD) over two years for scaling up.

Upcoming AI Initiatives

The MSS has announced further AI-focused initiatives under the Level-Up Strategy:

1. AI Super-Gap Challenge (Late February 2025): A collaboration between global enterprises and domestic AI startups to accelerate commercialization and market entry. LG Electronics will expand its on-device AI partnership, and Qualcomm Korea will introduce a vertical AI collaboration.
2. AI Regional Core Industry Collaboration Project (April 2025): A matchmaking program connecting AI startups with leading SMEs in regional industries based on their technology needs.

Industry Response and Government Strategy

Following the program announcement, MSS hosted an industry-wide discussion at the 63 Building in Yeouido, Seoul, where government officials, AI startup leaders, and experts analyzed the latest AI development trends.

Key industry figures, including Ha Jung-woo, head of Naver Cloud AI Center, and Lee Yong-jae, CEO of Mathpresso, emphasized the need for bold regulatory reforms and fast-tracked government support to keep pace with global competitors. They highlighted the case of China’s AI startup DeepSeek, which has rapidly advanced due to flexible regulations and strategic investment.

Minister Oh stressed the crucial role of AI in shaping industrial competitiveness, stating, “AI adoption is no longer optional but essential for businesses to remain competitive. The government will continue expanding support policies to foster an AI-driven economy.”

The MSS reaffirmed its commitment to growing Korea’s AI ecosystem through investment-friendly policies, deregulation, and initiatives designed to strengthen AI adoption among SMEs and startups.

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