SOUTH KOREA Trends and Developments Contributed by: Heejun Choi, Kyoung-Ho Kim, Sungsok Yang, Eunjee Kim and Kwang-Chun Park, Dentons Lee
Infrastructure Investment and the Rise of Sovereign Computing
more than 15,000 high-performance GPUs by 2028, providing subsidised, secure computing power to local research institutions, startups and small- and medium-sized enterprises. These massive industrial infrastructure projects require transactional lawyers to draft complex energy off-take deals, joint venture licensing structures and public-private partnership (PPP) compliance contracts that successfully navigate local zoning laws and tight power-grid regulations. Conclusion: Strategic Roadmap for Market Entry and Compliance South Korea’s rapid transformation into an AI-driven digital economy requires a holistic approach to reg - ulatory compliance and market strategy. Business leaders, tech developers and investors can no longer evaluate market risks purely through the baseline text of the AI Basic Act. The true compliance realities and ultimate commercial advantages lie in understanding how shifting administrative guidelines, sectoral data utility programs and massive infrastructure overhauls work together. To successfully navigate this evolving landscape, market participants should focus on four actionable strategies, as outlined below. • Strategic use of administrative grace periods: Enterprises should leverage the active one-year grace period under the AI Basic Act to design and deploy necessary machine-readable and human- readable labelling notices for generative products. This window should also be used to self-audit any operational algorithms (particularly in credit, lend - ing or core resource allocations) against the newly defined high-impact AI risk criteria. • Optimisation of data ingestion pipelines: Organisa - tions must align their ongoing data management with the PIPC’s four-phase generative AI lifecycle guidelines. Looking ahead, preparing internal tech - nical setups to take advantage of the upcoming late 2026 PIPA amendments will allow businesses to utilise the new fast-track data exemptions by structuring clear, public-interest impact assess - ments. • Transition to zero-trust security models: For finan - cial firms and global technology vendors, moving away from legacy perimeter-isolation systems is
South Korea’s regulatory changes are backed by an aggressive, state-led industrial policy designed to build national independence in computing power. The government treats computing capacity as a vital national resource, similar to advanced semiconductor manufacturing. The main tool driving this expansion is the KRW150 trillion Public Growth Fund. Managed by the FSC, the fund focuses on seven strategic areas across AI, semiconductor and battery markets, deploying over KRW30 trillion in initial capital. Of this first tranche, KRW6 trillion is legally earmarked for the AI sector to fund next-generation AI chip manufacturing and massive graphics processing unit (GPU) data clusters. This public funding runs alongside historic hardware purchase deals. A major global hardware supplier has signed an agreement to deliver 260,000 high-perfor - mance GPUs directly to the South Korean market, val - ued at roughly USD10.4 billion (KRW15 trillion). The distribution of this sovereign computing capacity is strategically split among five key public and private entities to strengthen the nation’s core industries: • the public sector – 50,000 units are allocated to the government for the National AI Computing Centre and public administrative infrastructure; • semiconductor manufacturing – 50,000 units are designated for integrating AI across advanced semiconductor manufacturing processes; • next-generation memory – 50,000 units are allocat - ed to a leading memory chip producer to develop next-generation high-speed hardware; • autonomous mobility – 50,000 units are assigned to a major automotive manufacturer for autono - mous driving vehicle testing and validation; and • sovereign cloud platforms – 60,000 units are allo - cated to a top-tier domestic cloud provider to build independent, local foundation AI models. To host these high-density hardware assets, a lead - ing domestic IT service provider is heading a special - ised special-purpose company (SPC) consortium to construct the National AI Computing Centre (NACC) in Jeonnam. This facility is engineered to house
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