TLDR
- South Korea is one of the leading countries in artificial intelligence (AI) development but is experiencing a significant shortage of computation, particularly for AI applications.
- The demand for GPUs in Korea is outpacing supply, with inventories of semiconductor chips in South Korea dropping by 33.7% in April 2024 compared to the previous year — the most significant decrease since 2014!
- io.net is a powerful alternative for Korean companies that need computation for AI-based applications, especially as global and local competition becomes fiercer.
South Korea has emerged as a dominant force in AI. According to Statista, the South Korean AI market is projected to reach $14.7 billion in 2030, with a total growth of 400% from 2024. The market size of generative AI alone is projected to grow 10x, reaching a market volume of $7.06 billion, and the total Korean AI market size is expected to grow 30% annually.
However, this growth comes with its demands and challenges, already leaving its mark on the industry. The sudden demand for AI-based computation-intensive applications in Korea has created a supply shock, limiting growth and potentially causing stagnation in current growth predictions.
Korea’s Booming AI Scene
South Korea ranks third globally in the number of AI patents filed between 2010 and 2021, with machine learning featured in around 77% of patents filed. Relative to population, South Korea also produces more engineering graduates than the United States, China, and India, and the desire to be a global leader in the AI industry remains a core governmental initiative.
On October 28th, 2024, Korea opened its national AI research lab in Seoul, a hub for global AI research, as part of an ongoing effort to become a leading country in the sector.
Since 2019, the country has been doubling down on AI with its “National Strategy for Artificial Intelligence.” Recently, the government announced plans to inject over 1.2 trillion won ($900 million)5 in developing AI technologies and services. Specifically, for its Research Lab, the government plans to invest a combined 94.6 billion won (US$68.2 million) by 2028 to help it lead the country’s joint AI research projects.
Demand for AI Solutions in Korea is Growing
The push for AI innovation is getting a foothold in South Korean society, with solutions being integrated across various sectors:
- The emergence of B2B-oriented generative AI solutions and services is expected to impact many aspects of the B2B business landscape.
- Financial institutions are applying AI in customer service, asset management, and investment advice.
- The manufacturing sector is using AI for process efficiency and gradual automation.
- AI chatbots and personalized services are becoming more prevalent in consumer-facing industries.
The government’s continuous efforts to invest in its AI industry will keep the country at the forefront of global competitiveness across several AI and technology sectors, driving innovation in language processing, computer vision, machine learning, and advanced robotics.
However, as South Korea rapidly grows its AI industry, the increased demand has already created a shortage of GPUs, leading to a supply shock in the market.
Supply Shortage and High Demand
The demand for GPUs is outpacing supply, with inventories of semiconductor chips in South Korea dropping by 33.7% in April 2024 compared to the previous year — the most significant decrease since 2014.
This decline comes alongside a high in shipments (exports), showing that demand is the real driver behind the shortage. The shortage of GPUs has led to several challenges:
- Substantial price increase: For example, the price of NVIDIA’s AI accelerators has surged from 40 million won ($29,561) to 80 million won ($59,121) since the beginning of the year.
- Prolonged wait times: Even for companies with the financial means to purchase GPUs, there are prolonged wait times of up to 52 weeks to secure sufficient quantities.
- Companies needing to restrategize: Naver Corporation, a prominent South Korean search portal, had to shift from NVIDIA GPUs to Intel CPUs for some of its AI infrastructure to meet demands.
These issues significantly impact South Korea’s AI industry, forcing companies to seek alternative solutions to meet their AI development and deployment computing needs. Price increases and increased competition for securing GPUs will continue to be a roadblock for the industry.
Without addressing the issue of supply and demand, South Korea’s AI industry’s growth trajectory could be halted due to a shortage of much-needed computational resources.
io.net to the Rescue
With the shortage of AI-based computation in Korea, AI researchers, developers, and entrepreneurs can seamlessly tap into the world’s largest and globally distributed GPU network. By aggregating underutilized GPUs from independent data centers, crypto miners, and decentralized storage providers, io.net offers users access to extensive computational resources without significant hardware investments. io.net’s decentralized GPU power grid is specifically created to serve AI and other computing-intensive innovations, precisely what we see being developed and researched in Korea.
Developers can distribute AI workloads, including reinforcement learning, deep learning, hyperparameter tuning, model serving, and more, across io.net’s global grid of GPUs.
The rise in prices within the Korean landscape is another challenge that io.net solves. It is among the most cost-effective solutions, providing compute powerups that are 90% cheaper than centralized alternatives. Projects do not need to purchase GPUs but can tap into an existing computation grid that they can use for their purposes and scale up according to their demand.
Solving Korea’s looming GPU Shortage
io.net is architecturally designed, through a flywheel of incentives, to solve the issue of supply and demand, one of the biggest challenges in the Korean AI industry. Projects tapping into io.net do not have to worry about the lack of supply side as they can measure, maintain, and monitor based on their computational needs. The demand for computation generates incentives that naturally increase the GPU supply almost autonomously due to competition. This creates a steadily growing distributed marketplace of computing power that has the power to serve as the backbone of a large portion of South Korea’s AI industry.
io.net’s computation grid is a powerful alternative for AI researchers, developers, and entrepreneurs seeking solutions. We have already seen decentralized GPU computing solutions adopted for AI research in Korea, demonstrating the growing market demand for scalable and sustainable systems to grow Korea’s AI industry.
Conclusion
South Korea has been a leading AI country and the government is not slowing down investments or growth. Korea and the wider world’s demands for AI-based computation have led to a shortage, creating several challenges for the Korean AI industry. Solutions like io.net are a great alternative, which could just about be the key to solving Korea’s challenges. Io.net’s infrastructure is created explicitly for AI-based computation and has an elastic supply and demand structure. While Korea is one of the first countries to experience such challenges, it won’t be the last, and io.net is set as a powerful solution!
