AI industry worries that regulatory burden will stunt growth

The South Korean artificial intelligence (AI) industry is concerned that the domestic legislative framework, which often imposes a heavy regulatory burden, could hinder its growth.

According to industry sources on Sunday, a bill on the development and use of AI, proposed by Representative Kwon Chil-seung of Democratic Party Korea, explicitly includes penalty provisions for AI service providers, stating it “establishes penalty provisions” for those who violate legal obligations.

“There is already a move towards regulatory legislation that bans the development of certain AI technologies or restricts foreign companies from entering the market. Although preventing negative side effects like deepfakes is important, premature regulations could stunt the industry’s growth before it even begins,” an industry insider said.

Regulation-heavy legislation is also hampering the emergence of unicorns. According to global market research firm CB Insights, Korea had only 15 startups among the 1,243 global unicorns as of July 2024. The United States and China led the list with 665 and 167 unicorns respectively, while Korea lagged behind Brazil with 17 and Singapore with 16.