Keep your AI scare in check

The time has come for Korea to overcome its fear with the spirit of challenge.

Choi Jae-boongThe author, a professor of mechanical engineering, is vice president of Sungkyunkwan University. The ChatGPT-triggered artificial intelligence (AI) revolution is sweeping the whole world. Upon affirming its limitless potential just 15 months after its release, big tech has been bent on developing generative AI programs together with paramount chip producers — another key player in the dramatic spread of generative AI. Chipmakers are engrossed in developing cutting-edge semiconductors for AI. The remarkably swollen market cap of tech companies shows it all.

The leader of the pack is Microsoft, whose market cap reached 4,264 trillion won ($3.15 trillion) as of April 2. After investing 10 trillion won in OpenAI, the creator of ChatGPT, in advance and installing ChatGPT in its all software, Microsoft has emerged as an uncontested leader in the field.

Apple, which ranked 1st in market cap over the past decade, surrendered the throne to Microsoft after failing to devise a strategy to tackle generative AI or secure talents. Surprisingly, third place went to Nvidia, the dominant producer of graphic processing units (GPUs), the engine for generative AI. Nvidia’s market cap soared to 3,053 trillion won, outpacing Samsung Electronics in just three years.

Taiwan Semiconductor Manufacturing Company (TSMC), the exclusive supplier of GPUs for Nvidia, has become No. 1 in market cap across Asia and ninth in the world. The surge in Samsung Electronics’ market cap to 563 trillion won on April 2 after long stagnation owed much to expectations for an increase in its production of High Bandwidth Memory (HBM) chips used to drive Nvidia’s GPU system.

Alphabet ranked at 5th, Amazon at 6th and Meta at 7th, and they are also devoted to developing AI. The aggregate market cap of generative AI developers — such as Microsoft, Apple, Alphabet, Amazon, Meta and Tesla — and AI chip developers — like Nvidia, TSMC, Samsung Electronics, Intel and Micron — has already exceeded 20,000 trillion won, which shows unprecedentedly high capital concentration.

The Sino-U.S. hegemony battle over AI is fiercer than ever. Backtracking on its strong criticism against protectionism, the United States offers hefty government subsidies to AI chipmakers on its home turf. China is no exception. Amid the heated AI war, Japan also spends an enormous amount of money building a top-caliber AI chipmaking ecosystem.

But the biggest obstacle for Korea is its vague fear about the digital transition. After starting the service in 2010, Uber has grown into a top mobility platform with its market cap surpassing 200 trillion won. The amazing transformation was possible thanks to consumers’ choice. In the meantime, Airbnb became the standard for traveling, mobile banking replaced traditional finances, and YouTube and Netflix became the norm in broadcasting. Sixty percent of Koreans watch YouTube after 7 p.m. every day. Origin doesn’t matter. China’s online shopping platforms AliExpress and Temu are enjoying popularity in Korea.

But some Koreans still regard Uber and Airbnb as unlawful service providers, as they are tied to social norms rooted in collective scare and regulations. Many Koreans still fear the onslaught of AI technology and digital transition. The scare is being fueled by politicians who need their own fandom to prolong their term in office by exploiting fear. But it’s a different story when the transition is about the future growth of the country. We must not ruin the future for our younger generations.

The industry is gloating. In the AI software category, Korea is evaluated as being third, following the United States and China, due to Naver and Kakao’s devotion to maintaining platform sovereignty. Korea is also a leader in AI chipmaking technology along with the United States and Taiwan. Owing to the local platforms, a huge opportunity has come to Korea.

If you still think of Japan’s colonial rule over Korea with the maxim “A nation that forgets its past has no future,” you are still living in the past. Just think of the marvelous shift for a digital civilization over the past 20 years. Countries who prepared themselves for the arrival of the IT era could taste the sweetness of their success. But Germany and Japan, once dominant economic players, are declining after dragging their feet in the digital transition. The time has come for Korea to overcome its fear with the spirit of challenge. Korea has the proud history of becoming a developed country just half century after it was ruined by the war. We have no reason to be afraid.

Translation by the Korea JoongAng Daily staff.