Foster High-Growth AI Startups into Global Unicorns

On July 10th the Ministry of SMEs and Startups (Minister Oh Young-joo hereinafter referred to as MSS) held the first meeting of the ‘AI Startup Linkup Council’ at the Josun Palace in Gangnam Seoul. The event was attended by representatives from AI startup associations high-growth AI startups large corporations and experts. During this meeting MSS announced the ‘LevelUp Strategy for High-Growth AI Startups’ aimed at fostering startups to achieve unicorn status.

This council was established following the promise made by Minister Oh Young-joo during the launch of the ‘On-Device AI Innovation Challenge’ in March. The aim was to create a communication channel where AI startups can collaborate with large corporations to accelerate their global expansion.

Participants: (AI Startups) AI Startup Associations and High-Growth Startups (Corporations) LG Electronics KT SK Intel etc.
At the meeting MSS provided a detailed analysis of the AI ecosystem which has become foundational to innovations in advanced industries like bio and semiconductors globally. They unveiled the ‘LevelUp Strategy for High-Growth AI Startups’ designed to nurture startups that lead technological innovation and industry convergence within the ecosystem thus creating and expanding new markets.

The LevelUp Strategy consists of four strategic tasks: 1) Strategic support for five high-growth AI fields* 2) Strengthening growth by leveraging domestic market demand 3) Expanding growth momentum through global market entry and 4) Enhancing the utilization of expert personnel and establishing cooperative governance. The main contents are as follows:

(Promising Technologies) ① sLLM Startups ② AI Fabless Startups (Promising Industries) ① Manufacturing ② Healthcare ③ Cultural Content
1. Strategic Support for Five High-Growth AI Fields
Selecting startups optimized for On-Device AI and AI semiconductor fabless startups MSS will provide specialized support for commercialization product verification and innovation growth.

sLLM (small Large Language Model): Lightweight language models.
On-Device AI: AI execution within smart devices using AI semiconductors without the need for cloud support.
Additionally MSS will identify startups in three promising industries—manufacturing healthcare and content—that can achieve significant economic and social impacts through AI integration. Tailored support will be provided for the advancement of AI process solutions technology transfer promotion and data collection cost support.

2. Strengthening Growth by Leveraging Domestic Market Demand
The ‘On-Device AI Innovation Challenge’ will expand beyond laptops to include various smart devices such as home appliances and smartphones. MSS will also support collaborations between AI startups and large corporations industry associations and marketing agencies to promote AI-integrated technologies and market expansion.

The initiative will connect AI startups with regional manufacturing SMEs through specialized AI centers to provide AI solutions facilitating the commercialization and market entry of AI technologies.

MSS will match B2B-focused sLLM startups with AI technology demand startups to accelerate the commercialization of AI supply technologies and enhance product and service value.

MSS will facilitate public procurement of AI startups’ technologies by designating outstanding AI services as innovative products through the Public Procurement Service organizing purchase consultations between public institutions and AI startups.

Region-specific projects will be implemented to integrate AI startups with regional key industries developing new technologies and supporting commercialization to secure market pathways.

3. Expanding Growth Momentum Through Global Market Entry
MSS will support AI startups global expansion by increasing participation in international AI conferences and exhibitions helping to discover buyers and secure export contracts. Additionally MSS will assist in obtaining international certifications and regulatory approvals for key AI markets like the EU’s AI Act.

International funds will be established to invest in AI startups through global venture capital (VC) funds. MSS will support AI startups aiming for global expansion with VC investments and offer matched investments Global TIPS and technology guarantees for successful investment-attracted startups.

To assist AI startups in entering global markets MSS will introduce specialized accelerator programs and pilot country-specific technology agents to facilitate technology exchanges between AI startups and global companies. Legal advice and policy insurance for tech protection will also be provided to enhance responses to international legal disputes.

4. Enhancing the Utilization of Expert Personnel and Establishing Cooperative Governance
MSS will encourage high-level AI talent to venture into startups by supporting startup and commercialization funds for AI graduate students. Furthermore MSS will recruit skilled foreign AI software talent from countries like India and Vietnam to join AI startups and expand visa support and matching programs for foreign students in Korea.

To promote AI industry growth MSS will facilitate youth employment in AI startups by expanding specialized education in AI-intensive fields like bio and supporting internships and employment for undergraduates studying AI-related disciplines.

The ecosystem will be strengthened by forming councils of AI startup associations corporations and experts to discuss collaboration. Regular forums with top domestic AI experts will also be held to identify new AI policies.

During the council meeting LG Electronics presented the progress of the ‘On-Device AI Innovation Challenge’ launched in 2024 which is one of the key initiatives of the ‘LevelUp Strategy.’

(Field) Solutions utilizing Generative AI and On-Device AI.
(Support) PoC costs (20 million KRW per company in-kind 150000 USD) development HW/devices credits etc.
The challenge saw a high competition rate of 12.8:1 with 128 companies applying for 10 spots. Selected startups are currently collaborating with LG Electronics and other corporations for PoC until September.

Successful AI startups from this collaboration will see their On-Device AI technology integrated into next-generation LG laptops securing revenue for these promising AI startups.

Minister Oh Young-joo addressed the AI startups and experts emphasizing the strategic importance of AI in shaping the future of industries and nations. She affirmed MSS’s commitment to supporting high-growth AI startups in strengthening their competitiveness and securing leadership in the global market through the ‘LevelUp Strategy.’

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