Late last year, Seoul hosted a packed, high-profile AI showcase where Korea’s top engineers demoed new systems to an audience of tech executives, investors and tens of thousands online. The atmosphere was part science conference, part national sporting event: people cheered as teams took the stage, aware some might be appearing for the last time.
The demos are tied to a government-backed “survival tournament” — dubbed the “AI Squid Game” — announced in August and running for more than a year. Every six months, judges overseen by the Ministry of Science and ICT evaluate and eliminate teams’ foundation models, aiming to accelerate Korea’s push to become a serious AI power and to produce open-source models that can rival leading global systems.
This week’s judging delivered an unexpected double elimination. A Naver unit was cut after criticism that it relied on foreign technology, and NCSoft’s AI subsidiary was also dismissed on performance grounds (notably, the only team led by a woman). LG and SK Group affiliates, along with startup Upstage, remain in contention, and the ministry says it will add another team in the next stage. Two winners are expected in early 2027.
The stakes are both commercial and political. The government provides contestants with access to GPUs and datasets; winners stand to gain prestige and influence, while eliminated teams lose access to compute. Markets reacted accordingly, with Naver shares sliding and some remaining contenders rising.
The contest has also sparked a broader debate over what “homegrown AI” really means. Officials say models must be trained end-to-end with proprietary processes, data and architecture. Still, critics allege some teams borrow heavily from Chinese or other foreign architectures — a standard industry practice given the cost of training frontier models from scratch. The dispute peaked with accusations that Upstage’s model resembled a Chinese system; Upstage denied it and held a public verification session, after which the accuser apologised. Naver’s elimination was explicitly linked to partial use of an existing Chinese model, while SK Telecom and Upstage were not disqualified.
Underneath the spectacle, engineers describe punishing workloads and intense scrutiny, but also a sense of national mission. The government frames this as Korea’s next state-led industrial leap — like past bets on highways and broadband — now recast as an “AI Highway” of compute, data and next-generation networks, with chaebol and startups as the engine of delivery.
Source:Korea Tech Desk
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