South Korean government drops prominent tech names in push for sovereign AI

Two prominent technology companies have been cut from South Korea’s government-backed effort to build an artificial intelligence system without depending on American or Chinese technology. The Ministry of Science and ICT revealed the decision today after completing initial reviews of the national program.

Naver Cloud and NCSoft are no longer in the race. The other three organizations that will progress are Upstage, SK Telecom, and LG AI Research.

The government organized this competition to create what officials call a “sovereign AI” basic paradigm. The goal is to develop technology that South Korea can handle on its own.

Scoring criteria for the evaluation process

The two government agencies in charge of the assessment process were the Telecommunications Technology Association and the National IT Industry Promotion Agency. The teams were assessed using three criteria.

40 points were awarded for benchmark testing. This section evaluated the AI systems’ ability to comprehend language, solve issues, and produce written material.

35 points came from expert reviews. Experts examined the models’ training and design processes as well as whether the technology was genuinely novel.

The final 25 points came from user comments. The reliability and practicality of the systems were assessed in this section.

LG AI Research won all three categories. Reviewers emphasized SK Telecom‘s reliable operations and strong infrastructure. Upstage was acknowledged for its technological efficiency despite its small size.

The government explained why Naver Cloud was taken down. Officials claimed that the company’s proposal did not meet the criteria that models be built “from scratch.”

Reviewers from outside the company discovered that Naver’s vision encoder, which handles photos and visual data, was nearly identical to one made by Alibaba’s Qwen system in China. More than 99% of the weights in the two models matched. Naver Cloud supported this strategy, claiming that it improved performance and assisted with worldwide compatibility.

However, the ministry determined that the competition’s goal of attaining technical independence was undermined by modifying or utilizing significant components from foreign models.

NC AI, the NCSoft team, likewise failed. The group did not receive enough points to advance to the following round. Specific scoring information for this squad was not disclosed by the ministry.

The path forward

Naver Cloud declared today that it will not contest the ministry’s decision. The business intends to continue supplying the project with GPU infrastructure. Outside of this government competition, it will also focus on developing its own AI technologies.

Four teams should remain in the competition, according to the government. To fill the vacancy, officials said they will conduct another round of selection in the first half of 2026. Businesses including Kakao, KT, and Konan Technology who were rejected in previous phases will get another opportunity to participate.

The government plans to pick two final winners by 2027. Those teams will receive major backing from the state. Support includes access to KRW 1.9 trillion worth of powerful computing equipment and large national datasets.

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