South Korea Artificial Intelligence (AI) Market Overview
As per MRFR analysis, the South Korea Artificial Intelligence (AI) Market Size was estimated at 7.42 (USD Billion) in 2023.
The South Korea Artificial Intelligence (AI) Market Industry is expected to grow from 9.52(USD Billion) in 2024 to 37.19 (USD Billion) by 2035. The South Korea Artificial Intelligence (AI) Market CAGR (growth rate) is expected to be around 13.187% during the forecast period (2025 - 2035).
Key South Korea Artificial Intelligence (AI) Market Trends Highlighted
The South Korean Artificial Intelligence (AI) industry is expanding rapidly due to a variety of main market factors. One of the key driving forces is the government's strong support for AI development, as seen by its investment in national programs and financing for AI research and development. The South Korean government has launched steps to develop a robust AI ecosystem, including collaborations between academics, industry, and startups, creating an atmosphere conducive to innovation. South Korea, with its highly established IT infrastructure and growing tech-savvy populace, is well-positioned to capitalize on AI in a variety of areas, including healthcare and finance.
Recent developments in South Korea show a spike in AI usage across a variety of industries, including manufacturing and logistics, where automation is increasingly critical for operational efficiency. Furthermore, the education industry is incorporating AI technology to improve individualized learning experiences that are tailored to the needs of individual students. As the public and industry express concerns about privacy and data security, rules and standards in South Korea are being shaped by the rising awareness and demand for ethical and responsible AI usage. Enhancing AI applications in smart cities, notably in transportation and energy management, are potential opportunities in the South Korean AI sector.
The combination of AI with the Internet of Things (IoT) provides an opportunity to improve urban living conditions and increase sustainability efforts. Furthermore, as organizations seek to strengthen resilience to disruptions, AI-powered predictive analytics is gaining popularity, indicating a need for creative solutions. Overall, the South Korean AI market is prepared for significant transformation, propelled by technology improvements, strong regulatory backing, and a readiness to accept change across all industries.
Fig 1: South Korea Artificial Intelligence (AI) Market Overview
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
South Korea Artificial Intelligence (AI) Market Drivers
Government Initiatives and Investment in AI Technology
The South Korean government has been proactively investing in the development and deployment of artificial intelligence technologies. This commitment is evident through various policies aimed at enhancing the country's technology capabilities. According to the Ministry of Science and ICT, the South Korean government plans to allocate around 2 trillion won to AI research and development by 2024. This is part of a broader strategy to transform South Korea into a global leader in AI technology, especially in industries such as healthcare, transportation, and finance.
Established organizations like Samsung and LG have received government backing to invest heavily in AI-oriented projects, positioning them strategically to leverage these investments into innovative products and solutions. Therefore, the South Korea Artificial Intelligence (AI) Market Industry is expected to benefit significantly from these government initiatives, driving growth and establishing a robust foundation for future AI developments.
Rising Adoption of AI in Various Sectors
The increasing integration of AI into numerous sectors such as manufacturing, retail, and finance is a key driver for the South Korea Artificial Intelligence (AI) Market Industry. A report from the Ministry of Trade, Industry, and Energy indicates that 80% of major South Korean manufacturers are implementing AI technologies to enhance efficiency in production processes. Notable companies like Hyundai and SK Hynix are at the forefront of utilizing AI for predictive maintenance and supply chain management.
This rising adoption translates into a growing demand for AI solutions, further accelerating the market's expansion.
Growth in Data Generation and IoT Devices
The proliferation of Internet of Things (IoT) devices across South Korea has resulted in an unprecedented increase in data generation, serving as a crucial enabler for AI technologies. Recent data suggests that South Korea has over 8 billion IoT devices deployed, producing vast amounts of data, which is essential for training AI algorithms. This trend is reinforced by the government's 'Smart City' initiative that aims to integrate AI with urban development, showcasing how organizations such as KT Corporation and SK Telecom are leveraging this generated data to enhance AI applications in smart homes and cities.
Consequently, this growth in data and IoT presents substantial opportunities within the South Korea Artificial Intelligence (AI) Market Industry.
Talent Development and Education in AI
South Korea is prioritizing the development of a skilled workforce proficient in AI technologies, which is vital for sustaining growth in the artificial intelligence sector. Various universities, such as KAIST and POSTECH, are offering dedicated programs focusing on AI, with estimates indicating a 30% increase in AI-related graduates over the past three years. This commitment to education ensures a steady pipeline of talent ready to innovate and drive advancements in the South Korea Artificial Intelligence (AI) Market Industry.
As companies like Naver and Kakao recruit these graduates, they are better positioned to enhance their AI capabilities, fueling the overall growth of the market.
South Korea Artificial Intelligence (AI) Market Segment Insights
Artificial Intelligence (AI) Market Component Outlook Insights
The Component Outlook for the South Korea Artificial Intelligence (AI) Market exhibits a dynamic landscape reinforced by the rapid integration of AI technologies across various sectors, including healthcare, finance, and manufacturing. As the market evolves, it encompasses three main components: hardware, software, and services, each playing a pivotal role in the overall growth and adoption of AI in the region. Hardware, including high-performance computing systems and specialized processors, is crucial as it supports the vast computational needs of AI algorithms, allowing for real-time data processing and enhanced machine-learning capabilities.
The software aspect encompasses a wide range of applications, from machine learning frameworks to advanced data analytics platforms, which have become essential for businesses seeking to leverage AI insights to drive decision-making and operational efficiency. Services, which include AI consulting, integration, and ongoing maintenance, are also significant, as companies in South Korea are increasingly seeking expertise to navigate the complexities of AI implementation and maximize its potential benefits. Factors driving this market segmentation include South Korea's robust digital infrastructure, a high level of investment in technology, and government initiatives aimed at fostering AI development and innovation.
However, organizations face challenges such as skill shortages and the need for interoperable technologies, highlighting the importance of tailored solutions and strategic partnerships in the market. Given South Korea's position as a technology leader in Asia, the focus on component innovation and collaboration among industry stakeholders presents substantial growth prospects, particularly as AI adoption continues to expand across industries and improve efficiencies in various processes. Therefore, understanding the nuances of the Component Outlook is essential for stakeholders aiming to capitalize on the opportunities presented within the South Korea Artificial Intelligence (AI) Market.
Fig 2: South Korea Artificial Intelligence (AI) Market Insights
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Artificial Intelligence (AI) Market Technology Insights
The South Korea Artificial Intelligence (AI) Market, particularly in the Technology segment, is experiencing notable advancements, driven by the country's commitment to harness AI capabilities across various sectors. Machine Learning is arguably the backbone of this technology ecosystem, enabling systems to learn from data and make informed decisions, which plays a vital role in enhancing automation and improving efficiency in industries like manufacturing and finance. Natural Language Processing is significantly shaping customer interactions and service delivery, allowing businesses to offer personalized experiences and streamline communication processes.
Context-Aware Computing is emerging as a crucial element in tailoring user experiences and adapting applications based on situational awareness, which is especially beneficial in smart devices and IoT solutions prevalent in South Korea's tech-savvy population. Additionally, Computer Vision is gaining traction, facilitating advancements in security, healthcare, and retail by enabling systems to interpret and understand visual information. The blend of these technologies not only fosters innovation but also positions South Korea as a key player in the global AI landscape, reflecting its ambition to lead in technological advancements while addressing challenges and opportunities present in the AI domain.
Artificial Intelligence (AI) Market Deployment Mode Outlook Insights
The Deployment Mode Outlook within the South Korea Artificial Intelligence (AI) Market highlights significant growth driven by technological advancements and the increasing demand for AI solutions across various industries. With the digital transformation gaining momentum in South Korea, organizations are leveraging both On-premises and Cloud deployment modes. On-premises solutions offer enhanced data security and control, making them a preferred choice for industries with strict regulatory requirements, such as finance and healthcare. In contrast, Cloud deployment has gained traction due to its scalability, flexibility, and lower operational costs, appealing to startups and businesses seeking rapid innovation.
The synergy between these deployment modes caters to diverse business needs, enabling organizations to optimize their AI strategies effectively. As the South Korea Artificial Intelligence (AI) Market continues to evolve, this dual approach not only supports the integration of AI technologies but also facilitates a competitive edge for companies striving to enhance operational efficiency and customer experience. The collaboration between government initiatives and private sector innovation further propels the growth of AI applications, positioning South Korea as a leader in the global AI landscape.
Artificial Intelligence (AI) Market Organization Size Outlook Insights
The Organization Size Outlook for the South Korea Artificial Intelligence (AI) Market reflects a dynamic landscape characterized by various opportunities and trends. With government support for innovation and digital transformation, large enterprises are increasingly adopting AI technologies to enhance operational efficiency and drive competitive advantage. These organizations leverage AI for data analysis, predictive maintenance, and automation, leading to significant improvements in productivity. Meanwhile, small and medium-sized enterprises (SMEs) are also embracing AI as they recognize its potential to level the playing field against larger competitors.
SMEs adopt cost-effective AI solutions that allow them to optimize processes and gain insights into customer behavior. As the South Korean market continues to grow, both large enterprises and SMEs will play crucial roles in shaping the AI landscape, contributing to advancements in sectors like healthcare, finance, and manufacturing. The blending of resources from both segments is likely to drive innovation, making AI solutions increasingly accessible to a broader range of businesses.
Artificial Intelligence (AI) Market Business Function Outlook Insights
The South Korea Artificial Intelligence (AI) Market encompasses a diverse landscape characterized by its Business Function Outlook, which plays a crucial role in various sectors. Each business function, including Finance, Security, Human Resources, Law, Marketing and Sales, and others, showcases significant contributions to the overall market dynamics. The Finance sector particularly benefits from AI in streamlining processes and enhancing risk management strategies, fostering efficiency and accuracy in transaction analysis. In Security, AI technologies are vital for developing advanced surveillance systems and threat detection mechanisms, ensuring a stronger defense against cyber attacks.
Human Resources has seen a transformation through AI applications used in recruitment, personnel management, and employee engagement, significantly influencing workplace productivity. Additionally, the Law sector utilizes AI for case analysis, simplifying legal research and improving outcomes for clients. Marketing and Sales leverage AI to generate insights from consumer data, enabling targeted campaigns and improved customer experiences. Overall, these functions represent vital components of the South Korea Artificial Intelligence (AI) Market industry, reflecting robust growth opportunities while navigating challenges in technology adoption and integration.
Artificial Intelligence (AI) Market Industry Vertical Outlook Insights
The South Korea Artificial Intelligence (AI) Market is notably influenced by various industry verticals, each contributing to its growth in unique ways. In the BFSI sector, AI enhances fraud detection and improves customer service through chatbots, leading to increased operational efficiency. The IT Telecom industry leverages AI for network optimization and predictive maintenance, ensuring seamless operations. Healthcare is experiencing transformative advancements, with AI aiding in diagnostics and personalized treatment plans, thereby improving patient outcomes.
Retail is seeing a surge in AI integration for inventory management and customer insights, enabling a more tailored shopping experience. The Automotive sector incorporates AI for autonomous driving technologies and smart manufacturing practices, placing a strong emphasis on safety and efficiency. Advertising Media utilize AI in targeted marketing campaigns, optimizing ad spend effectiveness. Manufacturing benefits from AI through predictive analytics in supply chain management, driving productivity. Lastly, the Others category highlights emerging applications across various fields, showcasing the expansive nature of AI integration.
Overall, these segments demonstrate the diversified applications of AI within South Korea, underlining its importance for future market growth and innovation across industries.
South Korea Artificial Intelligence (AI) Market Key Players and Competitive Insights
The South Korea Artificial Intelligence (AI) Market is characterized by rapid growth and development, driven by significant investments in technology, infrastructure, and research. The country's strategic focus on AI is evident in its national policies that promote digital transformation across various sectors, including healthcare, finance, and manufacturing. South Korea is home to numerous tech companies that are at the forefront of AI innovation, which creates a competitive landscape where both established firms and startups thrive. The collaboration between government entities, private companies, and research institutions enhances the overall growth trajectory of the AI sector, ensuring that South Korea remains a leader in AI development on a global scale.
Samsung Electronics holds a prominent position within the South Korean Artificial Intelligence (AI) Market, leveraging its extensive resources and technological expertise to innovate continuously. The company has made substantial investments in AI research and development, focusing on integrating AI capabilities into its diverse product portfolio, including consumer electronics, smart home devices, and mobile technologies. Samsung Electronics emphasizes the development of AI software that enhances user experience and efficiency while maintaining a strong commitment to ethical AI practices. Its well-established brand presence and trusted reputation in South Korea give Samsung Electronics a competitive edge, as the company fosters collaborations and partnerships with leading technological institutions to stay ahead in the AI landscape.
POSCO, a leading steel manufacturer in South Korea, is actively leveraging AI technologies to enhance its operational efficiency and optimize its production processes. The company focuses on developing AI-driven solutions for predictive maintenance, quality control, and supply chain management within its manufacturing operations. POSCO's commitment to innovation has seen it invest heavily in AI research, facilitating the implementation of intelligent infrastructure to analyze massive datasets and streamline workflows. The company also aims to integrate AI into its smart factory initiatives, enhancing productivity while reducing costs. Additionally, through strategic partnerships and collaborations in the technology sector, POSCO seeks to expand its market presence, further positioning itself as a formidable player within the South Korean AI Market. This forward-thinking approach, combined with its solid industrial base, solidifies POSCO's status as a significant contributor to AI advancements in South Korea.
Key Companies in the South Korea Artificial Intelligence (AI) Market Include
South Korea Artificial Intelligence (AI) Market Industry Developments
In recent months, the South Korea Artificial Intelligence (AI) Market has seen significant developments, particularly in advancements by major companies. Samsung Electronics continues to enhance its AI capabilities, focusing on integrating machine learning into its consumer products. In August 2023, SK Telecom unveiled a new AI-powered mobile service aimed at improving customer experience and operational efficiency. Meanwhile, Kakao Corporation is expanding its AI-driven services, particularly in the chat and commerce sectors. Noteworthy activity in mergers and acquisitions includes Hancom Group’s acquisition of a promising AI startup in September 2023, further solidifying its commitment to AI innovation. Additionally, Hyundai Motor Company announced in July 2023 a collaboration with CureMetrix to enhance AI utilization in automotive safety features. The growth of AI technology has positively impacted the market valuation of these companies, contributing to increasing investment and innovation and enhancing South Korea's position as a leading AI hub in the Asia-Pacific region. The collective efforts of these companies align with the government's focus on driving AI development as part of its broader strategy to advance the national economy. Over the past few years, initiatives and funding from the South Korean government have catalyzed rapid advancements in AI technology.
Artificial Intelligence (AI) Market Segmentation Insights
Artificial Intelligence (AI) Market Component Outlook
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Hardware
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Software
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Services
Artificial Intelligence (AI) Market Technology Outlook
Artificial Intelligence (AI) Market Deployment Mode Outlook
Artificial Intelligence (AI) Market Organization Size Outlook
Artificial Intelligence (AI) Market Business Function Outlook
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Finance
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Security
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Human Resources
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Law
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Marketing And Sales
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Others
Artificial Intelligence (AI) Market Industry Vertical Outlook
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BFSI
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IT Telecom
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Healthcare
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Retail
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Automotive
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Advertising Media
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Manufacturing
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Others
Report Scope:,,,,,,,,,,,,,
| Report Attribute/Metric Source: |
Details |
| MARKET SIZE 2018 |
254.06(USD Million) |
| MARKET SIZE 2024 |
300.3(USD Million) |
| MARKET SIZE 2035 |
2556.25(USD Million) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) |
21.493% (2025 - 2035) |
| REPORT COVERAGE |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR |
2024 |
| MARKET FORECAST PERIOD |
2025 - 2035 |
| HISTORICAL DATA |
2019 - 2024 |
| MARKET FORECAST UNITS |
USD Million |
| KEY COMPANIES PROFILED |
LG Electronics, SK Telecom, AhnLab, Samsung Electronics, Korea Telecom, Hyundai Motor, Naver Corporation, Saltlux, Hanwha Techwin, Mando Corporation, Cloocus, Kakao Corporation, Daewoo Engineering and Construction, POSCO, Hana Financial Group |
| SEGMENTS COVERED |
Offering, Technology, Business Function, Verticals |
| KEY MARKET OPPORTUNITIES |
Healthcare AI solutions, Autonomous vehicle technology, AI-driven smart manufacturing, Natural language processing advancements, AI cybersecurity applications |
| KEY MARKET DYNAMICS |
Rapid technology adoption, Government investment initiatives, Strong research and development ecosystem, Growing startup ecosystem, Increasing demand for automation |
| COUNTRIES COVERED |
South Korea |
Frequently Asked Questions (FAQ) :
The South Korea Artificial Intelligence (AI) Market is projected to be valued at 9.52 USD Billion by the year 2024.
By 2035, the market value of the South Korea Artificial Intelligence (AI) Market is expected to reach 37.19 USD Billion.
The expected CAGR for the South Korea Artificial Intelligence (AI) Market from 2025 to 2035 is 13.187%.
By 2035, Software is projected to have the highest market value in the South Korea Artificial Intelligence (AI) Market at 17.8 USD Billion.
In 2024, the hardware segment of the South Korea Artificial Intelligence (AI) Market was valued at 2.85 USD Billion.
Key players in the South Korea Artificial Intelligence (AI) Market include Samsung Electronics, LG Electronics, and SK Telecom.
The services segment of the South Korea Artificial Intelligence (AI) Market is expected to reach a market size of 8.34 USD Billion by 2035.
The South Korea Artificial Intelligence (AI) Market is experiencing significant growth, with a consistent CAGR of 13.187% from 2025 to 2035.
Emerging trends in the South Korea Artificial Intelligence (AI) Market include advancements in software solutions and increased investments in AI services.
Major growth drivers for the South Korea Artificial Intelligence (AI) Market include technological advancements and increased demand across various sectors.
The South Korea Artificial Intelligence Market is expected to be valued at 300.3 million USD in 2024.
By 2035, the South Korea Artificial Intelligence Market is expected to reach a value of 2556.25 million USD.
The expected CAGR for the South Korea Artificial Intelligence Market from 2025 to 2035 is 21.493.
Major players in the South Korea Artificial Intelligence Market include LG Electronics, SK Telecom, AhnLab, and Samsung Electronics among others.
The South Korea Artificial Intelligence Market is segmented into hardware, software, and services.
The market value for hardware in the South Korea Artificial Intelligence Market is estimated to be 85.0 million USD in 2024.
The projected value of the software segment in the South Korea Artificial Intelligence Market is 1023.45 million USD by 2035.
The services segment is expected to be valued at 95.0 million USD in the South Korea Artificial Intelligence Market in 2024.
The growth opportunities in the South Korea Artificial Intelligence Market are driven by increasing demand for automation and innovation across various sectors.
Current trends indicate rising investments and technological advancements, positively impacting the growth trajectory of the South Korea Artificial Intelligence Market.
