# South Korea Applied AI Market > South Korea Applied AI Market Research Report By Components (Software, Services) and By Application (Healthcare, Finance, Retail and E-commerce, Predictive maintenance, Industrial robotics, Natural Language Processing, Energy and Utilities, Agriculture, Cybersecurity, Education, Entertainment and Media, Real Estate, Transportation and Logistics, Environmental Monitoring, Human Resources, Others)- Forecast to 2035 - **Forecast Period:** 2025 - 2035 - **CAGR:** 25.32% - **2024:** $ 6.29 Billion - **2025:** $ 7.88 Billion - **2035:** $ 75.29 Billion - **Key Players:** Google (US), Microsoft (US), IBM (US), Amazon (US), NVIDIA (US), Salesforce (US), Baidu (CN), Alibaba (CN), SAP (DE) **Report ID:** MRFR/ICT/57284-HCR · **Pages:** 200 · **Author:** Nirmit Biswas & Aarti Dhapte · **Last Updated:** February 06, 2026 **URL:** https://www.marketresearchfuture.com/reports/south-korea-applied-ai-market-59054 --- ## Market Summary ## **South Korea Applied****AI****Market Overview** As per MRFR analysis, the South Korea Applied AI Market Size was estimated at 4.17 (USD Billion) in 2023.The South Korea Applied AI Market is expected to grow from 5.23(USD Billion) in 2024 to 18 (USD Billion) by 2035. The South Korea Applied AI Market CAGR (growth rate) is expected to be around 11.889% during the forecast period (2025 - 2035) **Key South Korea Applied****AI****Market Trends Highlighted** Because of the nation's strong emphasis on technological innovation and government assistance, the South Korean applied artificial intelligence market is expanding significantly. The South Korean government has taken a number of steps to create an atmosphere that is conducive to the development of AI. As part of its Digital New Deal agenda, which aims to accelerate digital transformation across all sectors, this involves significant investments in AI research and development. The manufacturing, financial, and health sectors are especially well-positioned to use AI technologies to improve client experiences and streamline operations. In the middle of these initiatives, there are a lot of untapped potential in fields like AI-powered medical solutions, where predictive analytics can greatly enhance patient outcomes. AI applications that boost efficiency and cut costs are made possible by the growing need for automation in manufacturing processes. Additionally, South Korea's drive for smart cities is integrating AI into public safety, traffic control, and urban planning, demonstrating a trend towards employing AI to enhance urban quality of life. With stakeholders highlighting the significance of responsible AI deployment, recent trends show that South Korea is becoming more interested in AI ethics and laws. In order to build a strong AI ecosystem, there is also a discernible trend towards cooperation between the public and private sectors, as well as between educational institutions. Innovation and more specialised AI solutions that precisely address the demands of the South Korean market are anticipated to be fuelled by this partnership. Because of this, the South Korean applied AI market is developing quickly, mirroring these dynamic shifts and offering a wide range of opportunities for all parties involved. Source: Primary Research, Secondary Research, _Market Research Future_ Database and Analyst Review **South Korea Applied****AI****Market Drivers** **Government Initiatives and Investments in Artificial Intelligence** The South Korean government is deeply committed to the development and implementation of Artificial Intelligence technologies as part of its broader 4th Industrial Revolution strategy. The government outlined a plan to allocate approximately 2 trillion Korean Won (around 1.7 billion USD) towards boosting the AI sector from 2020 to 2025, focusing on Research and Development (R&D) and fostering a supportive ecosystem for tech startups. This significant investment will encourage innovation and applications of AI across various industries such as healthcare, finance, and manufacturing. Notably, large organizations like Samsung and LG are expected to play a pivotal role in this sector, as they align with government initiatives to explore AI applications in smart homes and various industrial processes. This synergy between government support and established corporations positions the South Korea Applied AI Market for substantial growth in the upcoming years, facilitated by a strong regulatory framework and investment focus that addresses the needs of businesses and consumers alike. **Increased Demand for Automation and Efficiency** The South Korea Applied AI Market is seeing a notable rise in demand as companies look to enhance automation and operational efficiency. The World Economic Forum highlights that the adoption of AI technologies can potentially boost productivity by up to 40% by 2035, which is a crucial incentive for South Korean industries. Notably, sectors such as manufacturing and logistics are leading this charge, with conglomerates like Hyundai and SK Group implementing AI-driven solutions to streamline operations and optimize supply chains. This increasing demand for enhanced operational capabilities is likely to propel market growth and create avenues for new market entrants focused on AI-driven solutions. **Growing Adoption of AI in Healthcare** The adoption of Artificial Intelligence in the healthcare sector within South Korea is rapidly accelerating, driven by both technological advancements and increased patient needs. Reports indicate that the country's aging population, with approximately 14% of citizens aged 65 and older, is creating a significant demand for innovative health solutions. Organizations such as Seoul National University Hospital are actively integrating AI technologies for diagnostics, patient monitoring, and personalized treatment plans. The Ministry of Health and Welfare also emphasizes the importance of AI in improving healthcare delivery and patient outcomes. This concerted effort demonstrates the impact of the growing aging demographic and healthcare demands on the South Korea Applied AI Market, fostering innovation and investment in AI healthcare applications. **South Korea Applied****AI****Market Segment Insights** **Applied****AI****Market Components Insights** The Components segment of the South Korea Applied AI Market plays a pivotal role in shaping the technological landscape, showcasing a diverse spectrum that primarily encompasses Software and Services. The growth in this sector is driven by the increasing adoption of artificial intelligence across various industries, with organizations increasingly recognizing the potential of AI in enhancing operational efficiency and decision-making processes. Particularly, Software components are crucial as they form the backbone of AI systems, enabling data processing, machine learning, and sophisticated algorithms that empower businesses to leverage deep insights from their data. In South Korea, a burgeoning digital economy fueled by investments in Research and Development has led to a significant demand for innovative software solutions, reinforcing the need for robust AI applications across banking, healthcare, and manufacturing sectors. On the other hand, Services associated with the Applied AI Market are essential as they offer implementation, maintenance, and consulting support, fostering successful deployment of AI technologies. This aspect is becoming increasingly important as enterprises seek to integrate AI into their existing frameworks, necessitating strategic partnerships with service providers that specialize in AI solutions. The South Korean government is also playing an influential role by promoting AI initiatives and easing regulations to facilitate faster adoption and innovation in the tech ecosystem. Moreover, given the country's focus on advanced technologies and smart city initiatives, the dynamics between Software and Services within the Components segment continue to evolve, driven by the necessity for customized solutions and scalable infrastructures. This segment highlights a vast potential for growth, correlating directly with the increasing complexity of AI applications as businesses strive for competitive advantage in an ever-evolving market landscape. The importance of the Components segment is underscored by the ongoing advancements in AI applications, paving the way for innovative solutions that cater to the unique challenges and opportunities faced by various industries in South Korea, ultimately supporting the nation's ambition to be a leader in the global AI arena. Source: Primary Research, Secondary Research, _Market Research Future_ Database and Analyst Review **Applied****AI****Market Application Insights** The South Korea Applied AI Market showcases a dynamic landscape within the Application segment, representing a substantial area of innovation and investment. Various sectors are harnessing the potential of applied artificial intelligence to enhance operations, drive efficiency, and improve customer experiences. In Healthcare, AI technologies support diagnostics and personalized medicine, revolutionizing patient care. The Finance sector increasingly utilizes AI for risk assessment and fraud detection, ensuring more secure transactions. Retail and e-commerce leverage AI for personalized marketing and inventory management, aiming to optimize sales and consumer engagement. Predictive maintenance and industrial robotics significantly improve operational efficiency in manufacturing and logistics, reducing downtime and enhancing productivity. Natural Language Processing plays a crucial role in customer interaction, enabling better engagement through chatbots and virtual assistants. The energy and utilities sector benefits from AI solutions for smart grid management, while Agriculture utilizes AI for precision farming and crop monitoring. Cybersecurity applications harness AI to detect and mitigate threats in real-time, ensuring data protection. Education, entertainment, and media sectors embrace AI to personalize content and optimize learning experiences. Real estate and transportation systems also employ AI technologies for smart asset management and route optimization. Overall, the South Korea Applied AI Market exhibits growth opportunities across diverse applications, driven by a skilled workforce and supportive governmental policies. **South Korea Applied****AI****Market Key Players and Competitive Insights** The South Korea Applied AI Market is rapidly evolving, characterized by intense competition and continuous innovation. As businesses across various sectors leverage artificial intelligence technologies to optimize operations, enhance customer experiences, and drive growth, the market has become a focal point for technological advancements. The landscape is marked by a diverse range of companies that offer various AI-driven solutions, including machine learning, natural language processing, and data analytics. With the government’s increasing support for AI development and investment in research and development initiatives, the market is witnessing substantial investments from both domestic and international players, further intensifying competition. Samsung Electronics remains a heavyweight in the South Korea Applied AI Market due in large part to its extensive portfolio of AI-driven products and services. The company integrates artificial intelligence into consumer electronics, smart appliances, and mobile technology, allowing for smarter and more intuitive devices. Samsung’s investments in research and development, along with strategic mergers and acquisitions, have strengthened its capabilities in AI and machine learning, particularly within the South Korean market. The company is committed to innovation and often sets industry standards with its advanced AI solutions. Moreover, its deep understanding of consumer behavior and market dynamics enables Samsung to tailor its offerings effectively, contributing to its dominant presence in the South Korean AI space. This combination of technological prowess, extensive market reach, and a commitment to continuous improvement solidifies Samsung Electronics' position as a leading force in the applied AI domain in South Korea. **Key Companies in the South Korea Applied****AI****Market Include** - Samsung Electronics - SK Telecom - AhnLab - LG Electronics - Hancom Group - Naver Corporation - Daumsoft - Neowiz - Hyundai Motor Company - Kakao Corp **South Korea Applied****AI Market****Developments** _T_he government's commitment to expanding compute power was demonstrated in February 2025 when it revealed intentions to acquire 10,000 GPUs to create a national AI computing centre.The establishment of the K-Humanoid Alliance in April 2025, which includes top colleges like KAIST and Seoul National University and large companies like LG and Doosan, signalled a concerted attempt to create sophisticated humanoid AI robots by 2028. Additionally, in May 2025, SK Group and Amazon Web Services announced a USD 5 billion joint venture to build the biggest AI data centre in the nation in Ulsan, with construction scheduled to start in September 2025. The government unveiled a ₩1.2 trillion investment plan earlier in May 2024 to advance cloud and AI capabilities related to manufacturing. In September 2024, the National AI Committee was established to guide AI strategy in both the public and commercial sectors. These actions align with significant business plans by Samsung, Hyundai, and LG to create autonomous robotics, AI processors, and spatial intelligence systems. When taken as a whole, these collaborations, strategic investments, and infrastructure development projects show a national strategy to establish South Korea as a leader in applied artificial intelligence worldwide. **South Korea Applied****AI****Market Segmentation Insights** **Applied****AI****Market Components****Outlook** - Software - Services **Applied****AI****Market Application****Outlook** - Healthcare - Finance - Retail and E-commerce - Predictive maintenance - Industrial robotics - Natural Language Processing - Energy and Utilities - Agriculture - Cybersecurity - Education - Entertainment and Media - Real Estate - Transportation and Logistics - Environmental Monitoring - Human Resources - Others ## Market Drivers ### Investment in AI Startups Investment in AI startups is significantly influencing the applied ai market in South Korea. Venture capital funding for AI-related startups has surged, with estimates suggesting that investments reached $1.5 billion in 2025 alone. This influx of capital is fostering innovation and enabling startups to develop cutting-edge AI solutions tailored to local market needs. As these startups emerge, they contribute to a vibrant ecosystem that enhances the overall competitiveness of the applied ai market. Furthermore, established companies are increasingly collaborating with these startups, creating synergies that drive further advancements in AI technology. ### Rising Demand for Automation The increasing demand for automation in various industries is a key driver of the applied ai market in South Korea. Businesses are seeking to enhance operational efficiency and reduce costs, leading to a surge in the adoption of AI-driven solutions. According to recent data, the automation market in South Korea is projected to grow by 25% annually, with AI technologies playing a crucial role in this transformation. Industries such as manufacturing, logistics, and healthcare are particularly focused on integrating AI to streamline processes and improve productivity. This trend indicates a robust future for the applied ai market, as organizations continue to prioritize automation. ### Integration of AI in Education The integration of AI technologies in the education sector is emerging as a significant driver for the applied ai market in South Korea. Educational institutions are increasingly adopting AI tools to enhance learning experiences and improve administrative efficiency. For example, AI-driven personalized learning platforms are gaining traction, allowing educators to tailor instruction to individual student needs. The South Korean government has allocated substantial funding to promote AI in education, with projections indicating a 40% increase in AI-related educational initiatives by 2026. This trend not only supports the development of a skilled workforce but also contributes to the overall growth of the applied ai market. ### Focus on Data Privacy and Ethics The applied ai market in South Korea is also shaped by a growing emphasis on data privacy and ethical considerations. As AI technologies become more pervasive, concerns regarding data security and ethical use of AI are rising. The South Korean government has introduced regulations aimed at ensuring responsible AI deployment, which may influence market dynamics. Companies that prioritize ethical AI practices are likely to gain a competitive edge, as consumers become more discerning about data usage. This focus on ethics could potentially lead to a more sustainable applied ai market, fostering trust and encouraging broader adoption of AI technologies. ### Technological Advancements in AI The applied ai market in South Korea is experiencing rapid growth due to significant technological advancements in artificial intelligence. Innovations in machine learning, natural language processing, and computer vision are driving the development of sophisticated applications across various sectors. For instance, the South Korean government has invested approximately $2 billion in AI research and development, aiming to enhance the capabilities of local industries. This investment is expected to yield a 30% increase in AI-related job opportunities by 2027. As companies adopt these technologies, the applied ai market is likely to expand, fostering a competitive landscape that encourages further innovation and collaboration. ## Future Outlook The applied AI market is projected to grow at a 25.32% CAGR from 2025 to 2035, driven by advancements in machine learning, data analytics, and automation technologies. **New opportunities:** - Development of AI-driven predictive maintenance solutions for manufacturing sectors. - Integration of AI in personalized healthcare applications to enhance patient outcomes. - Creation of AI-based cybersecurity systems to protect sensitive data and infrastructure. By 2035, the applied AI market is expected to achieve substantial growth, positioning itself as a leader in technological innovation. ## Segment Insights ### By Components: Software (Largest) vs. Services (Fastest-Growing) In the South Korea applied ai market, the distribution of market share among the components segment reveals a strong dominance of Software, which takes the lead with significant market presence. Conversely, Services is gaining rapid traction and is observed to be the fastest-growing component, attracting attention due to the increasing demand for AI implementation and support. This growth trend is primarily driven by advancements in technology, increasing investments in AI solutions, and the ubiquitous need for businesses to enhance operational efficiency. Software products are becoming integral to various industries, while the Services segment experiences a surge in demand for consultancy and tailored solutions, reflecting a broader trend of businesses seeking to leverage AI capabilities effectively. Software (Dominant) vs. Services (Emerging) The Software segment in the South Korea applied ai market is characterized by a robust portfolio of applications, providing essential tools for automation, analytics, and machine learning. This dominance is bolstered by continuous innovation and a shift toward cloud-based solutions. In contrast, the Services segment is emerging with a focus on customizing AI solutions to meet diverse client needs. This includes training, support, and implementation services, which play a crucial role in assisting businesses in harnessing AI technologies. As organizations increasingly recognize the transformative potential of AI, the Services segment is expanding rapidly, positioning itself as a vital complement to Software offerings. ### By Organization Size: Large Enterprise (Largest) vs. Small & Medium Enterprise (Fastest-Growing) The market share distribution in the Organization Size segment of the South Korea applied ai market reveals that Large Enterprises command a significant portion of the landscape, driven by their expansive resources and capacity for innovation. These enterprises leverage applied AI technologies to enhance their operational efficiency and competitiveness, thus capturing a larger share compared to Small & Medium Enterprises (SMEs) which are currently ramping up their utilization of AI solutions. On the other hand, Small & Medium Enterprises are emerging as the fastest-growing segment within this market. This growth is fueled by increasing affordability and accessibility of AI technologies, enabling SMEs to adopt innovative solutions that cater to their specific needs. The trend towards digital transformation has propelled these organizations to invest in AI, allowing them to compete more effectively with larger players and adapt to changing market demands. Large Enterprise (Dominant) vs. Small & Medium Enterprise (Emerging) In the Organization Size segment, Large Enterprises hold a dominant position due to their ample resources, advanced infrastructure, and robust investment capabilities in applied AI technologies. These organizations often lead the charge in innovation, leveraging AI to automate processes and drive efficiency across various departments. Conversely, Small & Medium Enterprises are rapidly becoming an emerging force in the South Korea applied ai market. Driven by the need for increased competitiveness, they are adopting AI solutions that are tailored for their scale and budget. This shift is characterized by a growing emphasis on agile methodologies and bespoke AI applications that address specific operational challenges, making them integral players in the market’s evolution. ### By Application: Healthcare (Largest) vs. Natural Language Processing (NLP) (Fastest-Growing) The South Korea applied ai market is witnessing a significant distribution of market share across various applications. Healthcare remains the largest segment, driven by advancements in diagnostics and patient care. Following closely are Finance and Retail and E-commerce, both experiencing notable integration of AI solutions for customer insights and fraud detection. Other segments such as Transportation and Logistics, and Cybersecurity also hold substantial shares as businesses increasingly adopt AI technologies to optimize operations and safeguard data. In terms of growth trends, Natural Language Processing (NLP) is emerging as the fastest-growing application, fueled by the demand for chatbots and voice recognition systems. The healthcare sector continues to grow rapidly as providers leverage AI to enhance service delivery, while Finance incorporates predictive analytics for improved decision-making. Overall, the demand for applied AI solutions is being propelled by the need for automation, efficiency, and the ability to analyze vast data sets effectively. Healthcare (Dominant) vs. Natural Language Processing (NLP) (Emerging) Healthcare is the dominant application in the South Korea applied ai market, emphasizing the use of AI in clinical diagnostics, treatment planning, and patient management. The integration of machine learning algorithms enhances patient outcomes and operational efficiency in healthcare organizations. Conversely, Natural Language Processing (NLP) is gaining traction as an emerging application, tailoring communication between machines and humans. Its growth is evident in the adoption of virtual health assistants and AI-driven customer service platforms. Both segments showcase the diverse potential of AI, with healthcare focusing on life-enhancing innovations while NLP is redefining user interaction across industries. ## Competitive Benchmarking The applied ai market in South Korea is characterized by a dynamic competitive landscape, driven by rapid technological advancements and increasing demand for automation across various sectors. Major players such as Google (US), Microsoft (US), and NVIDIA (US) are strategically positioning themselves through innovation and partnerships, which collectively enhance their market presence. Google (US) focuses on integrating its AI capabilities into cloud services, while Microsoft (US) emphasizes its Azure platform to provide tailored AI solutions. NVIDIA (US) continues to lead in AI hardware, particularly in graphics processing units (GPUs), which are essential for machine learning applications. These strategies not only foster competition but also stimulate growth within the market, as companies strive to differentiate their offerings. Key business tactics employed by these companies include localizing operations and optimizing supply chains to better serve the South Korean market. The competitive structure appears moderately fragmented, with a mix of established tech giants and emerging startups. This fragmentation allows for diverse innovation pathways, as smaller firms often introduce niche solutions that challenge the status quo. The collective influence of these key players shapes a landscape where agility and responsiveness to market needs are paramount. In October 2025, Google (US) announced a partnership with a leading South Korean telecommunications company to enhance AI-driven customer service solutions. This collaboration aims to leverage Google's AI technologies to improve user experience and operational efficiency in the telecommunications sector. The strategic importance of this move lies in its potential to solidify Google's foothold in a rapidly evolving market, where customer expectations for personalized services are on the rise. In September 2025, Microsoft (US) unveiled a new AI initiative focused on sustainability, aiming to reduce carbon emissions through intelligent resource management. This initiative aligns with global trends towards environmental responsibility and positions Microsoft (US) as a leader in integrating AI with sustainability efforts. The strategic significance of this initiative is profound, as it not only addresses pressing environmental concerns but also appeals to a growing segment of eco-conscious consumers and businesses. In August 2025, NVIDIA (US) launched a new AI platform specifically designed for the South Korean automotive industry, targeting advancements in autonomous driving technologies. This strategic move is crucial as it taps into the burgeoning demand for smart mobility solutions in the region. By focusing on the automotive sector, NVIDIA (US) not only diversifies its application of AI but also strengthens its partnerships with local manufacturers, thereby enhancing its competitive edge. As of November 2025, current trends in the applied ai market are heavily influenced by digitalization, sustainability, and the integration of AI across various industries. Strategic alliances are increasingly shaping the competitive landscape, as companies recognize the value of collaboration in driving innovation. Looking ahead, competitive differentiation is likely to evolve from traditional price-based competition to a focus on technological innovation, reliability in supply chains, and the ability to deliver tailored solutions. This shift underscores the importance of agility and responsiveness in a market that is continuously changing. ## Recent News & Developments _T_he government's commitment to expanding compute power was demonstrated in February 2025 when it revealed intentions to acquire 10,000 GPUs to create a national AI computing centre.The establishment of the K-Humanoid Alliance in April 2025, which includes top colleges like KAIST and Seoul National University and large companies like LG and Doosan, signalled a concerted attempt to create sophisticated humanoid AI robots by 2028. Additionally, in May 2025, SK Group and Amazon Web Services announced a USD 5 billion joint venture to build the biggest AI data centre in the nation in Ulsan, with construction scheduled to start in September 2025. The government unveiled a ₩1.2 trillion investment plan earlier in May 2024 to advance cloud and AI capabilities related to manufacturing. In September 2024, the National AI Committee was established to guide AI strategy in both the public and commercial sectors. These actions align with significant business plans by Samsung, Hyundai, and LG to create autonomous robotics, AI processors, and spatial intelligence systems. When taken as a whole, these collaborations, strategic investments, and infrastructure development projects show a national strategy to establish South Korea as a leader in applied artificial intelligence worldwide. **South Korea Applied****AI** ## Report Scope | MARKET SIZE 2024 | 6.29(USD Billion) | | --- | --- | | MARKET SIZE 2025 | 7.88(USD Billion) | | MARKET SIZE 2035 | 75.29(USD Billion) | | COMPOUND ANNUAL GROWTH RATE (CAGR) | 25.32% (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 Billion | | Key Companies Profiled | Google (US), Microsoft (US), IBM (US), Amazon (US), NVIDIA (US), Salesforce (US), Baidu (CN), Alibaba (CN), SAP (DE) | | Segments Covered | Components, Organization Size, Application | | Key Market Opportunities | Integration of advanced machine learning in local industries enhances efficiency and drives innovation in the applied ai market. | | Key Market Dynamics | Rapid advancements in technology drive competitive forces in the applied AI market, reshaping local industry dynamics. | | Countries Covered | South Korea | ## Frequently Asked Questions **Q: What was the overall market valuation of the applied AI market in 2024?** A: The overall market valuation was $6.29 Billion in 2024. **Q: What is the projected market valuation for the applied AI market in 2035?** A: The projected valuation for 2035 is $75.29 Billion. **Q: What is the expected CAGR for the applied AI market during the forecast period 2025 - 2035?** A: The expected CAGR for the market during the forecast period 2025 - 2035 is 25.32%. **Q: Which companies are considered key players in the applied AI market?** A: Key players include Google, Microsoft, IBM, Amazon, NVIDIA, Salesforce, Baidu, Alibaba, and SAP. **Q: What were the valuations for software and services in the components segment in 2024?** A: In 2024, software was valued at $2.52 Billion and services at $3.77 Billion in the components segment. **Q: How do small and medium enterprises compare to large enterprises in the applied AI market?** A: In 2024, small and medium enterprises were valued at $2.52 Billion, while large enterprises were valued at $3.77 Billion. **Q: What are the leading applications of applied AI in South Korea?** A: Leading applications include healthcare, finance, retail and e-commerce, predictive maintenance, and industrial robotics. **Q: What was the valuation of the healthcare application in 2024?** A: The healthcare application was valued at $0.75 Billion in 2024. **Q: What is the projected growth for the retail and e-commerce application by 2035?** A: The retail and e-commerce application is projected to grow to $8.5 Billion by 2035. **Q: What does the market data suggest about the future of applied AI in South Korea?** A: The data suggests a robust growth trajectory, with a projected valuation increase to $75.29 Billion by 2035. --- *This Markdown endpoint is provided for AI systems and LLM crawlers. 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