Naver Cloud, NC AI opt out of retender in sovereign AI project

(Yonhap)

Naver Cloud and NC AI, the two developers eliminated in the first round of South Korea’s national competition to build sovereign foundation artificial intelligence models, said Friday they will not participate in the government’s retender.

NC AI said it will instead focus on industry-specific AI models, reiterating its original strategy. Both companies had been among five teams initially shortlisted for the government-led project aimed at developing fully domestic foundation models trained from scratch.

“We will concentrate on developing foundation AI, industry-focused AI and physical AI technologies together with our consortium partners,” NC AI said.

The Ministry of Science and ICT announced Thursday that LG AI Research, SK Telecom and Upstage had advanced to the next stage. Although the ministry had planned to eliminate only one team in the first round, it dropped two and said it would open an additional selection round in the first half of this year to fill the fourth slot.

Naver Cloud, previously seen as a front-runner, said it accepts the decision and does not plan to submit another bid.

Kakao, which was eliminated earlier when the field was narrowed to five, also said it would not seek another chance. Other developers eliminated in the first round — including KT, Motif Technologies, Konan Technology and a KAIST-led consortium — are still reviewing whether to reapply.

The decision to reopen the competition has raised questions about planning consistency and rule stability. While the ministry said the “revival round” is meant to ensure fairness and global competitiveness, the abrupt change has unsettled the industry.

Under the original plan, teams were to be evaluated every six months, with one eliminated at each stage. A second review is scheduled for late June to early July, followed by another in December, leaving two finalists eligible for government support through mid-2027.

“For companies, reapplying carries significant cost with no clear guarantee of returns,” an industry official said. “There’s uncertainty over whether the effort is worth it.”