Homomorphic encryption technology company Cryptolab said on Jan. 15 that its demonstration project on encrypted AI model technology was selected as the best task, ranked No. 1, among 2025 defence experimentation projects and won a citation from the defence minister.

The project was part of the Defence Ministry's "Defense Innovation 4.0" strategy. It focused on verifying whether security technology could be applied in practice to enable the use of AI without concerns about classified data leaks. Cryptolab developed an "encrypted AI model" that enables AI analysis without decrypting data by applying homomorphic encryption technology. It said the approach showed generative AI could be used in operational work while minimising the risk of sensitive information leaks.

Through the demonstration, the military secured a technological foundation to use private-sector cloud services and AI models without exposing classified information externally, the company stressed. Cryptolab plans to expand the technology for data protection in military LLM environments.

Cryptolab Chief Executive Cheon Jeong-hee said, "I am glad that the defence minister citation and this selection seem to recognise that our technology has been acknowledged for both performance and security required at national security sites beyond the laboratory level." She added, "Based on our verified technological capabilities, we will expand applications beyond the defence sector across industries that handle sensitive data, such as finance and healthcare."