Report Overview

The South Korean government’s robust investment in growing AI startup ecosystem, rapid adoption of AI in semiconductor, healthcare, and financial services sectors, and the development of AI workforce are expected to boost the growth of South Korea Artificial Intelligence (AI) Market during the forecast period between 2025 and 2031.

South Korea Artificial Intelligence (AI) Market – Industry Trends & Forecast Report, 2031

South Korea Artificial Intelligence (AI) Market size was estimated at USD 3.33 billion in 2024. During the forecast period between 2025 and 2031, South Korea Artificial Intelligence (AI) Market size is projected to boost at a robust CAGR of 18.10%, reaching a value of USD 10.67 billion by 2031. South Korea's AI Market is driven by government investment in AI research and development, fostering innovation and infrastructure growth. The expanding AI startup ecosystem accelerates technological advancements and commercialization. Integration of AI in semiconductor manufacturing enhances efficiency and global competitiveness. Rising adoption in healthcare improves diagnostics and patient care. Financial services expansion leverages AI for fraud detection and automation. Talent development initiatives address workforce gaps. Regulatory support ensures ethical AI deployment, while technological advancements drive continuous improvements in AI capabilities.

Artificial Intelligence (AI) – Overview

Artificial intelligence (AI) is a transformative technology that enables machines to simulate human intelligence. It encompasses machine learning (ML), natural language processing (NLP), robotics, and computer vision, driving advancements across industries. AI enhances automation, decision-making, and predictive analytics, improving efficiency and accuracy. It powers applications in healthcare, finance, manufacturing, and customer service. While AI offers vast opportunities, ethical concerns, data privacy issues, and biases remain challenges. As AI continues evolving, its integration into daily life accelerates, shaping the future of technology and innovations.

South Korea Artificial Intelligence (AI) Market

Growth Drivers

Government’s Growing Investments in AI Initiatives

The South Korean Government is heavily investing in AI to drive technological and economic expansion. Initiatives like I-Korea 4.0 promote AI integration across industries, fostering innovation and global competitiveness. In 2024, the government allocated over SKW 1.2 trillion (USD 900 million) for AI development. Collaborations with private firms enhance research, talent development, and infrastructure, positioning South Korea as a leading AI hub. These investments accelerate AI adoption in healthcare, finance, and manufacturing, strengthening the nation’s digital economy.

Challenges

Limited Availability of AI Talent

South Korea faces a significant AI talent shortage, impacting market growth and innovations. Despite strong AI research output, top talent is increasingly migrating to foreign companies offering higher salaries and better opportunities. Domestic firms struggle to retain skilled professionals, limiting AI advancements. The disparity in investment between South Korea and global AI leaders further exacerbates the issue. Addressing this challenge requires enhanced education programs, competitive compensation, and government-backed initiatives to retain AI expertise.

Impact of Escalating Geopolitical Tensions on South Korea Artificial Intelligence (AI) Market

Intensifying geopolitical, trade, and tariff tensions among the countries across the major regions are reshaping South Korea Artificial Intelligence (AI) Market. The China-United States rivalry complicates talent acquisition, as restrictions on AI collaboration limit cross-border expertise. South Korea’s AI sovereignty push aims to retain domestic talent, but global competition for skilled professionals remains intense. Government investment prioritizes AI infrastructure over workforce development, raising concerns about long-term talent sustainability. Addressing these challenges requires strategic policies to attract and retain AI experts while navigating international uncertainties.

South Korea Artificial Intelligence (AI) Market

Segmental Coverage

South Korea Artificial Intelligence (AI) Market – By Offering

By offering, South Korea Artificial Intelligence (AI) Market is divided into Hardware, Software, and Services segments. The software segment holds the largest share of South Korea Artificial Intelligence (AI) Market by offering, driven by the rising adoption of AI-based applications across industries, such as healthcare, automotive, and finance. Software solutions, including machine learning (ML) platforms, natural language processing (NLP), and predictive analytics, are in high demand, due to their ability to enhance decision-making and operational efficiency. Additionally, government support for AI development and investment in smart technologies further boost the growth of the software segment.

South Korea Artificial Intelligence (AI) Market – By Technology

Based on technology, South Korea Artificial Intelligence (AI) Market is divided into Machine Learning (ML), Natural Language Processing (NLP), Machine Vision, and Autonomous & Sensor Technology segments. The ML segment is the largest technology in South Korea Artificial Intelligence (AI) Market. The ML segment’s market dominance in South Korea, due to its widespread application across industries such as healthcare, finance, manufacturing, and retail. South Korea's strong technological infrastructure and government-backed AI initiatives have accelerated machine learning adoption for predictive analytics, automation, and data-driven decision-making. The integration of machine learning in smart factories and robotics further strengthens its position as the leading segment in the country’s rapidly growing AI ecosystem.

South Korea Artificial Intelligence (AI) Market – By Application

On the basis of application, South Korea Artificial Intelligence (AI) Market is divided into Finance, Security, Human Resources, Marketing & Sales, Supply Chain Management (SCM) segments. The finance segment is the largest application in South Korea Artificial Intelligence (AI) Market, due to the rapid adoption of AI technologies in banking, investment, and insurance services to enhance fraud detection, automate trading, and improve customer service through chatbots and predictive analytics. Financial institutions in South Korea are increasingly leveraging AI to gain competitive advantages, reduce operational costs, and deliver personalized services, making the finance sector the most significant contributor to the country's AI market growth.

Competitive Landscape

Major companies operating in South Korea Artificial Intelligence (AI) Market include Samsung Electronics, POSCO, Hancom Group, AhnLab, Kakao Corporation, CureMetrix, Humatics, LG Electronics, Hyundai Motors Co. Ltd, Naver Corporation, and SK Telecom. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Scope of the Report

By Offering

• Hardware

• Software

• Services

By Technology

• Machine Learning (ML)

• Natural Language Processing (NLP)

• Machine Vision

• Autonomous & Sensor Technology

By Application

• Finance

• Security

• Human Resources

• Marketing & Sales

• Supply Chain Management (SCM)