South Korea launches AI Squid Game to build homegrown models and compete with US, China

South Korea Launches High-Stakes AI Squid Game to Challenge Global Leaders

South Korea has launched an ambitious government-sponsored competition to accelerate its artificial intelligence capabilities and compete with US and China in the global AI race. Dubbed the "AI Squid Game" after the popular Netflix survival drama, this tournament brings together elite engineers from the country's top technology companies in a ruthless elimination-style contest to develop the best homegrown AI models1

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Unveiled in August and designed to run for more than a year, the competition drew over a thousand attendees to Seoul's convention center late last year, with tens of thousands more tuning into the livestreamed event2

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. The Ministry of Science and ICT oversees a panel of judges that evaluates and eliminates teams every six months based on their AI foundation models' performance. Science and ICT Minister Bae Kyung-Hoon, appointed in July, believes Korea has a unique advantage as a "full-stack AI country" with advanced memory chips, domestic cloud infrastructure, and applications1

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Major Eliminations Shake Up the Competition

In a surprising development on Thursday, judges eliminated two prominent teams from the contest. Naver, one of Korea's largest tech companies, saw its unit dismissed for relying on foreign technology. NCSoft's AI subsidiary, the only team led by a woman, was also cut based on evaluations of its model's performance. This double elimination shocked observers, as only one team was expected to be removed at this stage1

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The remaining contenders include subsidiaries of LG and SK Group, along with AI startup Upstage. The science ministry announced plans to select an additional team to join the next competition stage, with two winners expected to be announced in early 2027. Market reactions were immediate: Naver shares fell following the announcement, while LG affiliates and SK Telecom Co. rallied1

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Leading Contenders and Their Homegrown AI Innovation

LG AI Research has emerged as the top contender, with its K-Exaone model achieving the highest overall score in the latest evaluation stage. SK Telecom has drawn attention for the sheer scale of its A.X K1 model, which boasts 519 billion parameters—roughly double the scale of K-Exaone and approaching the level of the latest DeepSeek models, though still trailing the most advanced version of ChatGPT. Higher parameters in machine learning typically indicate more sophisticated models with greater reasoning power, though they also demand heavier computing and energy requirements1

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Upstage, a five-year-old startup aiming for an IPO, remains in the running after unveiling a powerful and cost-efficient large language model. For participants, the stakes are extraordinarily high. The government provides access to GPUs and datasets, and winning teams will gain an influential and potentially lucrative position in the AI ecosystem. Eliminated teams lose access to the GPUs, making this a make-or-break catalyst for their AI ambitions1

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Racing to Become a Global AI Powerhouse

The government's strategy aims to breed innovation at speed and bolster homegrown AI innovation in a field increasingly dominated by US and Chinese players. Korea's ultimate goal is to develop indigenous open-source models on par with frontier models such as ChatGPT and DeepSeek1

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South Korea joins a growing list of nations pursuing sovereign AI strategies. France is investing billions to become a third AI hub, while Saudi Arabia and the UAE leverage massive capital to acquire advanced computing infrastructure and fund domestic models like Falcon LLM. Singapore, Japan, Canada, and India are also developing their own approaches1

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Korean officials are particularly committed to building domestic foundation models because the country is already a heavy user of AI—one of the world's biggest markets for ChatGPT by paying users. It also has the world's highest density of industrial robots, a sector poised for radical changes driven by the technology. "There are several countries vying to be No. 3, but we don't see ourselves as just another contender in that pack," said Minister Bae. "We believe we have a real shot at becoming a serious global player—one capable of challenging the top two."1

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As Chanjun Park, an assistant professor at Soongsil University in Seoul, noted: "It may look like a spectacle, but this is a high-stakes contest that will shape Korea's future."1

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The outcome of this competition will determine whether South Korea can establish itself as a credible third force in the global AI landscape, or whether it will remain dependent on technologies developed elsewhere.