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South Korea’s Ministry of Science and ICT narrowed its national AI initiative on January 15, 2026, eliminating Naver Cloud and NC AI from the selection process. LG AI Research, SK Telecom, and the AI startup Upstage advanced to the second evaluation stage in a government-led effort to secure technological sovereignty and position South Korea as a top three global AI power alongside the United States and China, according to reporting from News Article Insiders.

The decision follows a first-round evaluation of companies building a fully homegrown AI foundation model. The Ministry of Science and ICT based its selection on a comprehensive assessment that integrated user evaluations, expert reviews, and benchmark performance tests.

Why were Naver Cloud and NC AI eliminated?

The elimination of Naver Cloud surprised industry observers because Naver is the largest and most established AI player in South Korea. While Naver Cloud passed the performance evaluation and ranked within the top four teams for raw model capability, it was disqualified for failing to meet the project’s independence requirements.

Vice Minister Ryu Je-myung explained that expert reviewers determined Naver’s model did not qualify as a fully independent AI foundation model. This independence was a core condition for participation in the national project.

NC AI was eliminated for different reasons. According to the Ministry of Science and ICT, the company was dropped primarily due to relatively weak performance scores during the evaluation process.

The government had originally intended to eliminate only one team during the first round, but ultimately dropped two.

Which companies advanced in the national AI race?

Three organizations moved forward to the second stage of evaluation: LG AI Research, SK Telecom, and the startup Upstage.

LG AI Research emerged as the top performer in the first round. According to the Ministry of Science and ICT, the organization ranked first across all three evaluation categories: benchmark performance tests, expert reviews, and user evaluations.

What is the objective of South Korea’s AI initiative?

The government-led initiative aims to develop a foundation model that is entirely homegrown. By doing so, Seoul intends to secure technological sovereignty and ensure the country remains competitive against the dominant AI capabilities of the U.S. and China.

The Ministry of Science and ICT has established a 10-day objection period following the January 15 announcement. The results of the first round will be finalized if no appeals are filed within that window.