The government is reviewing a plan to use a special purpose company (SPC) jointly funded by the public and private sectors to develop frontier-level AI models.

On Sept. 30, government and industry officials said the Ministry of Science and ICT is discussing several 추진 options for frontier AI development, including an SPC structure jointly funded by the government and the private sector.

Proposals include the government investing about 5 trillion won to secure roughly a 30 percent stake, with the private sector contributing the remaining 70 percent.

The government is separately considering frontier AI development because it judges that competing with top global models requires concentrating larger computing resources and funding than before.

Ryu Je-myeong (류제명), second vice minister of science and ICT, said in August while announcing the results of the second-stage evaluation of Dokpamo that "a new approach is needed" to compete with models comparable to those of global frontier companies. He said the ministry is discussing with companies whether to disperse or concentrate resources.

The related industry expects that once the frontier AI project is fleshed out, the government will push a separate new call for proposals regardless of whether firms participated in Dokpamo.

The government’s review of an SPC in pushing frontier AI is in line with its policy direction of diversifying national R&D support from grant-centred funding to equity investment.

The Ministry of Science and ICT newly included investment-led R&D in its 2027 budget proposal. It plans to use tools such as SPCs jointly funded by the public and private sectors or investment funds in areas that require faster investment and commercialisation than the grant model. It plans to apply this first to gene and cell therapies for rare and incurable diseases, compound semiconductors, and commercialisation of public technology research outcomes.

At a news briefing marking his first anniversary in office in July, Deputy Prime Minister Bae said developing a frontier AI model would be expected to require about 10,000 of Nvidia’s next-generation Vera Rubin graphics processing units (GPUs). He estimated GPU purchases alone would cost about 350 billion won. He said it is realistically difficult for the government to concentrate resources on a specific company on that scale, and added the government is reviewing investment-led R&D such as taking an equity stake or setting up an SPC.

In AI, a public-private joint funding model has already been applied to the National AI Computing Center. It invested a total of 400 billion won, including 116 billion won from the public sector and 284 billion won from the private sector, to establish an SPC with a 29 percent public stake and a 71 percent private stake. A Samsung SDS-led consortium was selected as the private participant, and it is raising additional funds around the SPC to build a center worth 2.5 trillion won.

If an SPC is introduced for frontier AI, a key variable is whether it can actually draw large-scale private investment.

The National AI Computing Center previously saw two tender failures due to no bids in calls for private operators. It then adjusted project terms by lowering the public stake from 51 percent to below 30 percent and removing put options, among other changes. In the re-tender, a Samsung SDS-led consortium was selected as the private participant.