OpenAI Officially Enters South Korea... Establishes Third Asian Branch

OpenAI, the developer of ChatGPT, is establishing a Korean branch and officially entering the domestic artificial intelligence (AI) market. Jason Kwon, Chief Strategy Officer (CSO) of OpenAI, held a press conference at the Four Seasons Hotel in Seoul on the 26th, stating, "We will actively support Korea's national AI strategy." The Seoul office is OpenAI's third Asian branch following Tokyo, Japan, and Singapore.

Kwon CSO said, "Korea is a country with a competitive edge to lead in the AI field," and "We will cooperate to ensure that everyone benefits through 'Korean-style AI' by leading in the AI infrastructure sector."

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As OpenAI, a global AI giant, enters Korea, it is expected to cause a seismic shift in the domestic AI industry landscape. OpenAI announced its intention to establish a Korean branch and actively enter the domestic AI infrastructure and service market. OpenAI's ChatGPT accounts for 72% of the domestic generative AI app market share. Concerns are rising that the sovereign AI strategy, primarily driven by domestic companies, may face setbacks.

◇ OpenAI Mentions 'National AI Strategy Cooperation'

The background of OpenAI's announcement on the 26th to establish a Korean branch and actively cooperate with the national AI strategy is largely attributed to the AI investment pledges made by both ruling and opposition parties. For OpenAI, it is an opportunity to expand its own AI infrastructure with the support of the Korean government.

Jason Kwon, CSO of OpenAI, said, "The Korean government clearly recognizes AI as a future growth engine," and "We will actively cooperate with Korea, which has strong AI momentum, while supporting users and backing Korea's national AI strategy." He further emphasized, "There is a need for 'AI by Korea, for Korea, of Korea,' and we will cooperate to ensure that everyone benefits through Korean-style AI."

OpenAI has chosen Seoul as its 12th base. In Asia, it follows Tokyo, Japan, and Singapore as the third. OpenAI reportedly delayed opening a Seoul office last year due to Korea's political situation. An AI industry official said, "Korea has many users and is also driving AI nationally, so OpenAI can't help but focus on the Korean market." According to OpenAI, the weekly active users of ChatGPT in Korea have surged 4.5 times over the past year. The number of paid subscribers ranks second after the United States.

OpenAI has opened the possibility of collaboration in building data centers in cooperation with Korean partners, including the national AI computing center promoted by the Korean government. Kwon CSO said, "In the AI era, infrastructure is the key element that determines the fate of each country," and "We plan to find ways to cooperate to build Korean-style AI that can benefit everyone." OpenAI operates the 'OpenAI for Country' program, which builds AI infrastructure in a joint investment manner with governments of various countries. In this regard, OpenAI is mentioned as one of the key support companies and customers for the 5GW (gigawatt) data center facility being promoted by the United Arab Emirates (UAE).

◇ Domestic Industry Pours Out Expectations and Concerns Simultaneously

In the AI industry, it is expected that OpenAI will actively target the business-to-business (B2B) market in Korea, including financial companies. It is said that OpenAI will strengthen its own sales organization separately from Microsoft Korea (MS). Korea ranks among the top five in the world for enterprise ChatGPT users. OpenAI has entered into a strategic alliance with Kakao for technological cooperation and has partnered with Krafton to introduce in-house ChatGPT.

With OpenAI's entry into the domestic market, the domestic AI industry has simultaneously poured out expectations and concerns. While AI infrastructure development is positive, it could become a strong competitor. According to WiseApp and Retail, ChatGPT accounts for 72.6% of the domestic generative AI app market share. There is a significant gap with the second-place domestic company, Rytun (10.2%), and SK Telecom's AI agent A.Dot (6.5%).

An AI industry official pointed out, "Naver and others are emphasizing the sovereign AI strategy with their own models, and OpenAI could be a variable in this regard," and "There is also the possibility that foreign companies could encroach on the domestic AI ecosystem."

OpenAI has expressed its position that it could also be involved in AI policies such as the AI Basic Law. Kwon CSO said, "If there is a way to grow AI safely and advancedly in Korea, we are ready to collaborate." OpenAI also held closed-door meetings with the Democratic Party, the People Power Party presidential camps, and others on this day. Major presidential candidates are putting forward AI infrastructure pledges such as the AI Sovereign Fund (Lee Jae-myung, Democratic Party candidate) and the 100 trillion won fund (Kim Moon-soo, People Power Party candidate).

Reporter Go Eun-i koko@hankyung.com