Korea’s Basic AI Act: Balancing Innovation and Regulation
In December 2024, South Korea made a groundbreaking move by enacting the Framework Act on the Promotion and Trust of Artificial Intelligence, becoming the first nation to merge AI strategy, industrial promotion, and regulation under a single statute. While this legislative act positions Korea as a pioneer in AI policy, it also introduces significant risks that could hinder the very growth it aims to promote.
The Dual Nature of the Framework Act
The Framework Act encompasses two primary components: promotion and regulation. The promotional aspect includes ambitious plans for investment in data infrastructure, the establishment of new AI clusters, talent training, and internationalization efforts. These initiatives are critical for developing a competitive AI ecosystem that can thrive on a global scale.
However, the regulatory provisions pose substantial concerns. Instead of addressing actual risks, they introduce broad and often ineffective rules. For instance, the criteria for classifying “high-impact AI” rely on a compute threshold—a metric that determines risk based on the amount of computational power used in training an AI model. This approach is flawed; it equates computational power with danger, much like regulating aircraft solely by their fuel tank size, which does not reflect their safety.
Regulatory Burdens and Their Implications
Sections 33 to 35 of the Act, which focus on high-impact AI, impose rigorous requirements for self-assessments, documentation, and reporting. This bureaucratic burden does not inherently enhance safety or reliability. Instead, effective regulation should prioritize performance-based oversight, focusing on measurable outcomes rather than extensive paperwork.
Sector-specific ministries, such as the Transport Ministry for autonomous vehicles or the Health Ministry for medical applications, possess the necessary expertise to establish relevant benchmarks. Additionally, technical bodies like the Korea Research Institute of Standards and Science can develop compliance protocols that are both practical and effective.
Misguided Provisions and Their Consequences
Other elements of the Act are equally concerning. Requirements for watermarking and labeling AI outputs may create an illusion of safety without addressing the underlying issues of disinformation, deepfakes, or intellectual property theft. Instead of fostering security, these mandates could overwhelm businesses with regulatory paperwork.
The regulatory “clock” metaphor aptly illustrates the situation: If regulations are implemented too quickly, they may stifle industry growth; if too slowly, societal protection is compromised. Currently, Korea’s regulatory framework appears to be outpacing industrial development, creating friction in the progress of AI innovation.
Opportunities for Adjustment and Improvement
Fortunately, the law is set to take effect in January 2026, allowing time for adjustments. The Ministry of Science and ICT is in the process of drafting Enforcement Decrees that will determine the practical implementation of the law. Lawmakers have the opportunity to refine the overly broad definition of “AI system,” remove prescriptive R&D mandates, and reconsider rules that may disadvantage small and medium enterprises (SMEs).
Regulators can also eliminate the problematic compute threshold, introduce grace periods before imposing fines, and reshape high-risk AI obligations around performance metrics instead of rigid compliance frameworks.
A Path Forward for AI Regulation
Korea stands at a crossroads. It can either redefine how strategy, promotion, and regulation are integrated to build both trust and competitiveness in the AI sector or risk becoming a cautionary example of how overregulation can stifle innovation. The essential question is not whether AI should be regulated, but rather how regulation can be optimally designed and paced.
The current situation demands a precision policy clock—one that harmonizes strategy, promotion, and regulation to ensure that they progress in unison, fostering a robust and innovative AI landscape in Korea.
