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, MRFR 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, MRFR 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
South Korea Applied AI Market Developments
The 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 â‚©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
Applied AI Market Application Outlook
| Report Attribute/Metric Source: | Details |
| MARKET SIZE 2023 | 4.17(USD Billion) |
| MARKET SIZE 2024 | 5.23(USD Billion) |
| MARKET SIZE 2035 | 18.0(USD Billion) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 11.889% (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 | Solasta, Samsung Electronics, SK Telecom, CureMetrix, AhnLab, SoftBank Robotics, LG Electronics, Hancom Group, Lotte Group, Naver Corporation, Daumsoft, Neowiz, Hyundai Motor Company, Kakao Corp |
| SEGMENTS COVERED | Components, Application |
| KEY MARKET OPPORTUNITIES | Healthcare AI innovations, Manufacturing automation solutions, Financial services optimization, Smart city technologies, Retail customer personalization strategies |
| KEY MARKET DYNAMICS | Rapid technological advancements, Government initiatives and support, Increased investment from enterprises, Rising demand for automation, Strong focus on research and development |
| COUNTRIES COVERED | South Korea |
Frequently Asked Questions (FAQ) :
The South Korea Applied AI Market is anticipated to be valued at approximately 5.23 USD Billion by the year 2024.
By 2035, the South Korea Applied AI Market is projected to reach a valuation of around 18.0 USD Billion.
The South Korea Applied AI Market is expected to grow at a CAGR of 11.889% during the period from 2025 to 2035.
Major competitors in the South Korea Applied AI Market include companies such as Samsung Electronics, LG Electronics, and SK Telecom among others.
The software segment of the South Korea Applied AI Market is expected to be valued at around 2.12 USD Billion in 2024.
The services segment is projected to reach a valuation of 10.75 USD Billion by the year 2035.
Significant growth opportunities exist in sectors such as healthcare, automotive, and finance within the South Korea Applied AI Market.
Current challenges in the South Korea Applied AI Market include data security issues and the need for skilled workforce in AI technologies.
Advancements in technology have been driving innovation and adoption in the South Korea Applied AI Market, enhancing its growth prospects.
Emerging trends in the South Korea Applied AI Market include increased automation, improved machine learning algorithms, and application-specific AI solutions.
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Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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