South Korea's 'AI Squid Game' Eliminates Tech Giants in High-Stakes Contest
Late last year, over a thousand people packed a Seoul convention center. Elite engineers presented their latest artificial intelligence developments. The auditorium buzzed with complex jargon. Yet Korean tech executives and investors saw it as a must-attend event. Rumor spread that the science minister skipped a parliamentary hearing on a data breach at Coupang Inc. He came to watch the demonstrations instead. This marked a rare, high-stakes contest. Teams competed to prove they had created the best homegrown AI models.
Tens of thousands tuned into the livestream. Cheers and shouts erupted each time contestants stepped into the spotlight. For some, this was their final appearance. People now call the competition the "AI Squid Game." This nickname nods to the popular Netflix survival drama. The government-sponsored tournament started in August. It will run for more than a year. Officials designed it to identify leaders in Korea's bid to become an AI powerhouse.
Ruthless Format and Surprising Eliminations
The format is ruthless, much like the show that became a symbol of Korea's cultural soft power. A panel of judges, overseen by the Ministry of Science and ICT, evaluates and eliminates teams every six months. On a recent Thursday, judges made surprising cuts. They eliminated the unit of Naver Corp. Critics had accused it of using foreign technology. Judges also dismissed the AI subsidiary of NCSoft Corp. This was the only team led by a woman. Evaluations of its model's performance led to its removal.
This development shocked many. Observers expected only one team to be cut. The subsidiaries of LG and SK Group remain in the running. AI startup Upstage also stays in the contest. The science ministry announced it would select an additional team to join the next stage. Two winners are expected in early 2027.
"It may look like a spectacle, but this is a high-stakes contest that will shape Korea's future," said Chanjun Park. He is an assistant professor in the School of Software at Soongsil University in Seoul.
Global Race for AI Sovereignty
The government bets that competition will breed rapid innovation. It aims to bolster a homegrown AI industry. US and Chinese players increasingly dominate the field. Officials state the ultimate goal. They want to develop indigenous open-source models. These models should match global frontier models like ChatGPT and DeepSeek.
South Korea joins a growing list of nations. They are determined to prevent their industries and workforces from falling behind in AI. France also aims to become a third AI hub. Its government invests billions in AI projects and promotes homegrown players. Saudi Arabia and the UAE leverage massive capital. They acquire advanced computing infrastructure and fund domestic models like Falcon LLM. Others, including Singapore, Japan, Canada, and India, work on their own sovereign AI strategies.
Korean officials show particular commitment. They want to build homegrown foundation models. The country is already a heavy AI user. It has one of the world's biggest markets for ChatGPT by paying users. Korea also has the world's highest density of industrial robots. This sector faces radical changes led by AI technology.
Korea's Unique 'Full-Stack' Ambition
Science and ICT Minister Bae Kyung-Hoon was appointed in July. He thinks Korea can capitalize on its unique standing. He calls it a "full-stack AI country." It has its own advanced memory chips, domestic cloud, and applications.
"There are several countries vying to be No. 3, but we don't see ourselves as just another contender in that pack," he said. "We believe we have a real shot at becoming a serious global player — one capable of challenging the top two."
Contenders, Controversy, and High Stakes
For participants, the contest could make or break their AI ambitions. The government provides access to GPUs and datasets. Winning teams gain an influential and possibly lucrative position in the AI ecosystem. Eliminated teams lose access to the GPUs. Shares in Naver fell after Thursday's announcement. Shares in LG affiliates and SK Telecom Co. rallied.
LG AI Research is widely seen as the top contender. Its model, named K-Exaone, had the highest overall score in the latest stage. SK Telecom also draws attention due to its model's sheer scale. Its model, A.X K1, boasts 519 billion parameters. That is roughly double the scale of K-Exaone. It nears the level of the latest DeepSeek models, though it trails the most advanced ChatGPT version.
Generally, higher parameters indicate more sophisticated models with greater reasoning power. Parameters reflect the number of variables used in machine learning. However, this can also mean heavy computing and energy requirements. Upstage, a five-year-old startup aiming for an IPO, remains in the running. It unveiled a powerful and cost-efficient large language model. The government plans to soon accept applicants for a fourth contestant. The next round of evaluations is expected mid-year.
Debate Over 'Homegrown' AI
The competition sparked debate over what constitutes real, homegrown AI. The government emphasizes a need for AI foundation models to be trained end-to-end. They should use proprietary learning processes, data, and architecture from the ground up. As teams fight to match global leaders, claims dog them. Critics say some used foreign technology despite official requirements to build models from scratch.
The controversy peaked when a rival firm accused Upstage's Solar Open model. It said the model closely resembled a Chinese model, GLM-4.5-Air. Upstage denied the charge and convened a public verification session. This forced an apology from the accuser. Yet scrutiny spread to other participants. Critics accused Naver Cloud of incorporating vision encoders and weights similar to architectures from Chinese labs like Alibaba Group Holding Ltd. SK Telecom's model also faced scrutiny for alleged architectural similarities to a Chinese model.
Building on existing architectures is common practice in AI development. For many, the time and cost of creating a frontier model from zero are prohibitive. Many players lean, to some extent, on foundational research by leaders like Meta Platforms Inc. In eliminating Naver Cloud, government officials told reporters its partial use of an existing Chinese model violated program requirements. They clarified they saw no reason to disqualify SK Telecom or Upstage. On Thursday, Naver said it respected the panel's decision.
Emotional Toll and National Pride
Even without disputes, participants said emotions run high. Engineers on different teams work around the clock. They inspect dataset quality and tweak models to boost performance. This work can be both repetitive and time-consuming. Lee Jinsik leads LG AI Research's Exaone Lab. He said he works so late that it has been months since he saw his toddler awake.
Yet he and other project leaders express excitement. They are part of a competition with major consequences for Korea's technology industry and broader economy. "This is nerve-racking. But this is exactly how K-pop took off," said Upstage CEO Sung Kim. He compared it to audition shows that gave rise to early stars of Korea's now-famous music scene. "I'm pretty sure the same thing will happen in the field of AI and science in Korea."
Historical Parallels and Future Vision
South Korea is not the only country pursuing its own AI capabilities. Yet the initiative follows a familiar pattern for the nation of 51.6 million. It rose from the ruins of the Korean War through state-led investment and private-sector ambition. By channeling funding into critical industries, the government repeatedly transformed a once-impoverished country into a thriving capitalist democracy.
In 1968, South Korea still depended on US food aid. Then-President Park Chung Hee pushed through the Seoul-Busan highway. Many dismissed the project as a reckless fantasy at the time. Chung Ju Young, the late founder of Hyundai Group, backed it anyway. He later built the world's biggest shipbuilding company in Korea. This helped catalyze the country's industrial takeoff. Three decades later, President Kim Dae Jung directed another pivot. He laid ultra-fast broadband that sparked the country's digital rise.
President Lee Jae Myung now frames artificial intelligence as the next great leap. In a November budget speech, Lee pledged to build an "AI Highway." This national infrastructure includes compute power, data, and the rollout of 6G technology. By invoking the same logic that built roads and the web, Korea bets it can once again engineer its way to the top.
Private Sector Drive and Personal Sacrifice
This time, the private sector acts as the primary engine for the state-led initiative. Chaebol and budding startups lead the charge. SK Group Chairman Chey Tae-won made an online video appearance at the December event. He emphasized how important a homegrown sovereign AI model was for the country's future.
All that attention brings pressure as well as pride, said Kim Tae Yoon. He leads SK Telecom's foundation model team. He says he has gone gray since the contest started. In a break from tradition, he was too busy to help with the annual harvest at his parents' tangerine farm on Jeju Island, off the southern coast.
"To be involved in a project this important is a rare honor," he said. "It's an engineer's dream."
