The Ministry of SMEs and Startups (MSS) announced its plans to boost AI utilization in South Korea at the 3rd National AI Committee meeting on February 20. Chaired by Acting President and Deputy Prime Minister CHOI Sang-mok, the meeting outlined strategies to propel the country’s competitive edge in artificial intelligence, paralleling global AI investments by major economies such as the United States, France, and the EU.

In light of Chinese startup DeepSeek‘s advancements that rival those of U.S. tech giants, MSS has launched initiatives to support AI startups and encourage AI integration within small and medium-sized enterprises (SMEs). By 2027, MSS aims to elevate AI adoption in SMEs from 28% to 50% and develop five global AI unicorns.

To achieve these goals, MSS will bolster AI startups by industry sector, promoting AI model development through collaborative efforts. This will include support for startups providing AI services in sectors like manufacturing and finance, and the creation of new business models. Additionally, MSS plans to set up a ‘data generation lab’ to support 100 specialized manufacturing AI companies with comprehensive funding, manpower, and market expansion assistance, including loans and guarantees up to KRW 10 billion per company.

Moreover, MSS intends to create demand markets for AI services by facilitating public-private innovation projects that encourage collaborations between large companies and startups. This effort will be supplemented by expanding successful smart factory initiatives from the Ministry of Trade, Industry, and Energy.

To support AI startups further, MSS will allocate 60% of the new KRW 9.8 trillion liquidity supply for SMEs in 2025 to innovative growth sectors like AI and semiconductors. An AI fund worth approximately KRW 3 trillion, combining public and private investments, will be established by 2027 to boost financial backing for AI startups.

Over 50% of the new KRW 330.1 billion R&D budget for SMEs will also be directed towards strategic technologies such as AI. High-risk, high-reward AI projects will be prioritized, with up to KRW 10 billion in funding available from R&D grants and private investments. MSS plans to facilitate joint research with leading global institutions like MIT and introduce an AI-focused accelerator system to promote international expansion.

Minister Oh Youngju emphasized the critical need for urgency in adopting AI across everyday products and sectors. She highlighted that the rise of companies like DeepSeek opens growth opportunities by focusing on specialized AI service sectors where Korean startups and SMEs can thrive, thereby fostering national AI leaders and strengthening their global market presence.