AI Makes Inroads Into the Advertising Market Artificial intelligence is rapidly transforming the advertising industry. (Image courtesy of Yonhap)
Seoul, June 12 (Korea Bizwire) — As President Lee Jae-myung’s administration sets its sights on making South Korea one of the world’s top three artificial intelligence (AI) powers, a growing chorus within the tech industry is calling for a shift in focus — from grand-scale infrastructure projects to practical, sector-specific solutions that bridge the widening gap between AI supply and demand.
While the government is investing heavily in computing infrastructure and domestic large language model (LLM) development, many small and medium-sized businesses remain hesitant and ill-equipped to adopt AI. According to Wishket, a leading IT outsourcing platform, only 2.9% of South Korea’s SMEs had implemented AI tools as of 2024.
“SMEs often feel overwhelmed by the complexity and rapid pace of AI technology,” said a Wishket representative, citing lack of data refinement skills and AI literacy as key obstacles. In addition, cost concerns — from hiring skilled developers to paying for solutions and consulting — further stall adoption.
Meanwhile, freelance developers with strong AI skills face their own hurdles. Soaring subscription fees for essential AI tools, many provided by U.S. tech giants, are becoming unsustainable. “My AI software costs more than my office rent,” one developer told Wishket, warning that these tools are fast becoming another form of “monthly rent” for freelancers.
Im Moon-young, Chair of the Democratic Party’s Digital Special Committee, Holds Meeting with Wishket. (Image courtesy of Wishket’s “Trending IT” )
The structural mismatch between demand (SMEs) and supply (freelancers) is gaining political attention. On June 2, just before the presidential election, Wishket conveyed these concerns directly to Lim Moon-young, chair of the Democratic Party’s digital policy committee and a leading candidate for the newly proposed post of AI Chief in the Lee administration. Lim reportedly acknowledged the problem of “digital rent” and market imbalance.
Industry experts argue the real frontier for South Korea’s AI strategy lies in cultivating vertical AI ecosystems — solutions deeply embedded within specific industries such as law, finance, and manufacturing.
Rather than chasing a “Korean ChatGPT,” they recommend leveraging existing global models and applying them effectively within industry contexts, creating exportable know-how and generating real economic impact.
Startups are already showing what’s possible. BHSN, which secured 16 billion won (approx. $12 million) in funding, is building legal AI systems that support intelligent legal research using retrieval-augmented generation (RAG) and optical character recognition (OCR). It is expanding from its base in Japan into Vietnam, China, and Indonesia.
Vessel AI, which has raised 22 billion won (approx. $16 million), developed a secure AI platform for financial institutions that automates complex document analysis — already adopted by Hyundai Motor, LG Electronics, and Samsung SDS.
“Silicon Valley is shifting away from generic LLMs and toward industry-specific, ready-to-use vertical AI solutions,” said Vessel AI CEO Ahn Jae-man. “This trend is where real, differentiated competitiveness lies.”
Critics caution that focusing solely on national AI sovereignty and full-stack model development — especially without clear policy directions on GPU access, data processing, and algorithmic infrastructure — could isolate Korea’s ecosystem in a “Galápagos effect,” rendering it incompatible with global markets.
A domestic startup executive summed up the prevailing mood: “There’s growing consensus that ‘Korean-branded’ AI is less important than practical AI tailored to each industry’s needs. The question now is whether the new government’s policies will align with that reality.”
Kevin Lee (kevinlee@koreabizwire.com)
