Korea Science Minister Dismisses AI Bubble Fears, Cites Domestic NPU Progress

"The AI bubble will not come. Korea has been somewhat late in private AI investment, but results will definitely emerge starting next year."

Bae Kyung-hoon, Deputy Prime Minister and Minister of Science and ICT, dismissed the "AI bubble theory" that has recently been raised primarily in the United States during a press briefing near the Government Sejong Complex on Wednesday.

"Low-cost AI chips and servers will soon appear in the market, and results will become visible starting next year, centered on domestic companies developing neural processing units (NPUs)," Bae said.

The government's position is that it will continue active investment and support domestic companies in achieving results, as the spread of AI technology has become an irreversible trend.

Recently, the so-called "AI bubble theory" has emerged in global markets as massive investments have failed to translate into meaningful earnings for AI-related companies. However, Deputy Prime Minister Bae noted that cheaper technologies capable of replacing Nvidia's graphics processing units (GPUs) are rapidly emerging.

"From a corporate perspective, it is true that discussions about utility are arising because massive investment in data and infrastructure is required," Bae said. "Google's Tensor Processing Unit (TPU) was slow when I personally used it in the past, but its performance has greatly improved now."

His assessment is that as technologies capable of lowering AI computing costs mature rapidly, the market could re-enter a growth phase once infrastructure diversifies and cost structures improve.

Such changes in the global environment could also present opportunities for Korea, which aims to become one of the top three global AI powers. The Ministry of Science and ICT plans to secure 13,000 GPUs this year and 24,000 next year for a total of 37,000, while the private sector plans to introduce 260,000 Nvidia GPUs.

"Domestic private companies were also hesitant to invest while weighing utility, and just last year there was talk that 'even securing 10,000 GPUs would not be easy,'" Bae said. "But this year, the government pushing to secure 50,000 units and cooperating with the private sector to secure a total of 260,000 units by 2030 is a meaningful change."

He explained that conditions have been established for the public and private sectors to jointly expand the AI ecosystem and focus on technology development.

"If we can connect current investments to business results and raise the potential growth rate to 3% or higher through this, AI investment will continue," Bae emphasized. "Securing 260,000 GPUs alone will not completely solve the infrastructure problem, but what is important is creating an 'AI basic society' where citizens can experience tangible effects and benefits through AI."

Bae also clarified the government's role in supporting domestic corporate growth.

"Since the AI ecosystem can never be built by public efforts alone, the public sector will serve as a catalyst so that domestic companies can accumulate references and expand overseas," he added. "Such infrastructure must be built to prepare for the next 10 years."

However, concerns have emerged in the scientific community that investment in basic science could be neglected as the Ministry of Science and ICT concentrates its investment and policy capabilities on AI.

In response, Bae said, "I am confident that AI can be used to innovate various science and technology fields such as quantum and bio." He added, "Until now, there was no AI mature enough to lead such innovation, but we will establish this framework in earnest in 2026."