South Korea’s AI startups are lagging in attracting investment compared to those in China and India, as recent findings revealed. The tech-focused Singaporean publication Tech in Asia released a list of the ‘Top 50 AI Startups in Asia’ based on funding. Chinese startups dominated the list with 24 entities, securing the most significant accumulation of investments. India claimed the second spot with 10 companies.
The Chinese startup Minimax, developing a chatbot comparable to ChatGPT, topped the ranking with an impressive total investment of approximately $850 million. Following Minimax were BaiChuan Intelligent Technology, Suiwaikeji, and fourth place was taken by AI21 Labs from Israel, amassing around $272 million in funds. Indian startups were prominently positioned in the upper echelon of the list.
Only one South Korean AI startup, an AI semiconductor company named Rebellion, made it to the top 10, garnering roughly $198 million in investments. Another notable Korean firm, the AI semiconductor developer Sapion—a subsidiary of SK Group—was ranked 16th with an investment of $110 million. Companies in the fields of AI logistics and industrial autonomous driving, namely Pasto and Seoul Robotics, also received substantial investments.
The country’s overall private investments in AI fell behind, as evidenced by their drop from sixth to ninth place in the global ranking, as per the ‘AI Index 2024’ report published by Stanford University. While South Korea dropped in rank, the US and China maintained the top two positions, with private sector investment reaching approximately $67 billion and $7.7 billion, respectively. South Korea’s investments tallied at around $1.39 billion, a significant dip from the previous year’s $3.1 billion.
Challenges and Controversies
One of the key challenges South Korean AI startups face is the intense competition from their Chinese and Indian counterparts, which have large domestic markets that attract investors. China has been pushing its AI development aggressively as part of its national strategy, leading to considerable government support and funding opportunities for startups. Indian startups also benefit from a vast pool of tech talent and a growing ecosystem that supports entrepreneurship and innovation.
Controversies may arise concerning the conditions that lead to the disparity in investment growth across these countries. This can include debates over the regulatory environment, ease of doing business, government support, intellectual property protection, and access to skilled labor — all of which are critical to startup success and attractiveness to investors.
Advantages and Disadvantages
One of the advantages that South Korea has is its reputation for strong hardware manufacturing, particularly in semiconductors, which gives it a strong foundation in the growing market for AI hardware. Additionally, South Korea’s strong emphasis on education and R&D could leverage its AI capabilities. However, the lack of sufficient investment can undermine such potential.
A disadvantage that is evident from the article is the smaller size of investments in South Korea’s AI startups. This limited funding could impede the growth and scaling-up of these companies and might cause South Korea to miss out on leading global AI trends.
The source of the article is from the blog lokale-komercyjne.pl