[Special Report on New Government Foreign Policy Recommendations] III. New Government's Technology Diplomacy Strategy Centered on Artificial Intelligence Technology

I. Background

As of 2025, the AI competition is unfolding on all fronts, centered on the US and China's struggle for leadership in AI models and technological infrastructure, the EU's norm-setting strategy, the AI development strategies of the UK, Japan, South Korea, and the Middle East, and the pursuit of regulations on AI weapons and global AI safety governance. It is no exaggeration to say that artificial intelligence has become a focal point for the reshaping of the world order, extending beyond technological levels to encompass economic security and norms. The acquisition and utilization of artificial intelligence technology have become essential for a nation to achieve economic prosperity, strengthen national security, and lead international norms in the 21st century. Nations are striving to increase investment and nurture talent to enhance their AI technological innovation capabilities and utilization, while simultaneously formulating technology diplomacy strategies to expand their influence in the development and application of AI technology.

In May 2025, Sam Altman and other business leaders participating in the "Winning the AI Race" hearing held by the US Senate unanimously pointed out that AI is a technology that will bring about greater changes than the internet, and although the US currently holds an advantage, the gap with China, the challenger, is not that large. They particularly emphasized that the US and China are competing not just in technological development but also in the global dissemination of technology, and that for the US to maintain its leading position, it must lead international cooperation along with continuous investment in comprehensive areas, including infrastructure and energy.

Early this year, the Chinese startup's generative AI model 'DeepSeek-R1' caused a significant stir as a low-cost, high-efficiency model, attracting attention as an alternative to US-led AI development. Emboldened by DeepSeek, the Chinese government proposed the 'AI+' strategy in its 2025 Two Sessions (两会), designating artificial intelligence (AI) as a core element of its national strategy. The Two Sessions mentioned the concept of 'Embodied Intelligence (具身智能)' and emphasized the promotion of AI application industries centered on manufacturing, such as humanoid robots, connected cars, and AI smartphones, stating its intention to foster innovation by applying AI to various industrial sectors beyond manufacturing, including finance, transportation, public services, healthcare, education, and welfare. China is building data centers and computing infrastructure through the 'East Data West Computing (东数西算)' project, where data from eastern regions is processed in western regions. Simultaneously, it has been promoting the 'AI Global Governance Initiative' to form a global AI governance framework and standard norms with broad consensus, based on respecting the policies and practices of various countries, and to support the establishment of a global AI governance body under the United Nations (UN). China leads in AI paper and patent submissions, and Chinese AI models are spreading to various regions such as the Middle East, Latin America, and Southeast Asia. According to the 2025 Stanford Index, the US has developed 40 notable AI models, significantly ahead of China (15) and Europe (3). However, while quantitative superiority is maintained, the performance gap with Chinese models is rapidly narrowing from double digits in 2023 to nearly equivalent levels today. As China's AI challenge begins to show partial results, a significant shift is occurring, with cracks appearing in the US's previous overwhelming dominance, and whether this trend will continue is a key point of observation.

The European Union (EU), after finalizing its 'AI Act' at the end of 2024, announced a public and private AI investment plan of 200 billion euros at the 'AI Action Summit' held in Paris in February 2025, striving to lead global norms for 'trustworthy AI.' In April 2025, Singapore hosted an AI Safety Summit that brought together major AI companies such as OpenAI, Google DeepMind, Anthropic, and Meta, as well as leading academic institutions including MIT, Stanford, Tsinghua University, and the Chinese Academy of Sciences. Singapore emphasized its friendly relations with both the US and China, presenting a vision to contribute to the establishment of global AI governance by promoting international cooperation in AI safety and strengthening its role as a neutral mediator in this field. Saudi Arabia is attracting attention by promoting a structural transformation from a resource-dependent economy to a technology-centric nation, establishing the AI company 'Humain' using its Public Investment Fund (PIF) and building Arabic-based AI models and large-scale data centers. The EU, Singapore, Saudi Arabia, as well as Japan, South Korea, Australia, Canada, and many other countries are exploring AI strategies to establish and solidify their positions within the global AI technology development landscape led by the US and China. Last year, a UN General Assembly resolution agreed by 164 countries that the risks of autonomous weapons require urgent attention from the international community. As a follow-up, discussions on regulating AI-based 'killer robots' took place at the UN in May 2025, but a binding agreement was not reached due to differences in the positions of the US, China, and Russia. Various international organizations, including the UN – OECD, UNESCO, G7 – as well as individual countries and companies, are proposing various measures to ensure AI safety, but these have not yet led to tangible results.

The AI policy of the United States, which is currently leading AI development, has a significant impact on the global direction of AI deployment. While the previous Biden administration sought to balance AI innovation and safety regulations, the Trump administration's second term, upon taking office, sent a message prioritizing innovation over AI safety regulations by rescinding the Biden administration's 'Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence.' Immediately thereafter, it issued the 'Executive Order on Removing Barriers to American Leadership in Artificial Intelligence' and directed the submission of an AI implementation plan to the President within 180 days to strengthen America's global AI leadership, competitiveness, and national security. Furthermore, in cooperation with OpenAI (AI research and development), Oracle (data management and cloud infrastructure provision), and SoftBank (fundraising), it announced a large-scale 'Stargate Project' with an investment of $500 billion over the next four years to build a US-centric AI ecosystem and strengthen the competitiveness of the US AI industry in response to China's AI technological advancements, signaling substantial investment in the AI sector.

In March 2025, the US Department of Commerce's Bureau of Industry and Security (BIS) announced export controls on 80 companies, including 53 Chinese firms, signaling that export controls on advanced technologies to China would continue under the second Trump administration. BIS cited China's military modernization and its support for the development of AI and quantum computing technologies as reasons for the export controls on these companies. The Biden administration pursued a policy of protection (export controls against China), promotion (support for domestic advanced manufacturing capabilities through the CHIPS Act), and partnership (with the EU, Japan, Taiwan, and South Korea), collectively known as the '3P policy,' which effectively curbed China's rise in technology. However, the second Trump administration is employing a different approach to supporting advanced manufacturing and technological alliances, prioritizing "America First," and it remains to be seen how this will affect the effectiveness of curbing China. The Trump administration argues that imposing tariffs to drive domestic advanced manufacturing investment is more effective than providing subsidies to foreign companies and seeks to achieve desired outcomes through pressure rather than cooperation with allies. Semiconductors were mentioned as an exception to mutual tariffs alongside copper and pharmaceuticals, with item-specific tariffs foreshadowed, making it noteworthy to observe the future direction of tariffs related to semiconductors and artificial intelligence. The Trump administration recently imposed a 32% tariff on Taiwanese products, but temporarily exempted semiconductor products, reflecting the importance of Taiwan's semiconductor industry in the US market. Amidst the acceleration of global supply chain restructuring and the decline of the free trade order due to the Trump administration's export controls and tariff pressures, nations face the challenge of strengthening their advanced technological capabilities, reconfiguring frameworks for international cooperation, and pursuing their prosperity and security through delicate technological diplomacy.

II. 제언

Корея разработала и реализует стратегию в области искусственного интеллекта (ИИ), основанную на своих сильных сторонах в технологиях ИИ и инфраструктуре на базе полупроводников. Были подготовлены основные положения Закона об ИИ, а также предложены глобальные правила управления ИИ под лозунгом «инновации, безопасность, инклюзивность» на «Сеульском саммите по ИИ» в 2024 году. Однако существующие меры недостаточны для навигации в эпоху ИИ. В условиях, когда ИИ становится центральным элементом процветания и безопасности, требуются более смелые политические меры для повышения возможностей Кореи в области ИИ, уровня его использования и глобального влияния.

First, investment in AI infrastructure and human resources, which form the basis of technological diplomacy, must be significantly expanded and supplemented. South Korea developed its semiconductor technology innovation capabilities through bold investments in the early 1980s, which have become our most important diplomatic asset today. It is clear that the artificial intelligence technology we acquire will become a crucial diplomatic card in the future. Investment for this must be made now. In 2024, South Korea's total AI investment, including government and private sectors, is estimated at approximately 3.7 trillion KRW, which is significantly insufficient compared to the US ($190 trillion KRW) and China ($52 trillion KRW), even considering the difference in economic scale. Although the government unveiled an ambitious plan last year to invest a total of 65 trillion KRW by 2027, the investment performance achieved so far remains very modest compared to the plan and to other countries. A prominent example of insufficient AI investment is evident in the number of latest AI chips, NVIDIA's H100, that have been secured. Securing state-of-the-art chips is crucial for continuous AI technology development; currently, South Korea has secured about 2,000 units, which is far less than the millions in the US or the estimated 100,000 in China. A concrete technological diplomacy strategy must be developed to secure chips, along with securing financial resources. Regarding domestic AI personnel, the absolute shortage in numbers is a problem, but the fact that 40% of domestic AI personnel have emigrated abroad is a negative factor for South Korea's AI development in the long term, requiring urgent countermeasures. Additionally, institutional conditions such as energy acquisition and personal data protection, which are crucial for the widespread adoption of AI technology, must be developed concurrently.

Technological diplomacy has two aspects: utilizing diplomacy for technological development, and utilizing technology for diplomatic communication or achievements. We ask whether diplomacy is important for the development and expanded utilization of AI technology. Primarily, domestic investment, human resource development, and various support policies for technological development are important. However, it is clear that technological development does not occur in a vacuum or within a limited domestic space. R&D activities themselves often occur through international exchange, requiring the import of core technologies, necessary materials, and equipment, as well as the export of developed technological products. During periods when the liberal world economic order functioned smoothly, cross-border technology exchange occurred overwhelmingly in terms of cost and efficiency. However, in times of instability in the liberal world political and economic order, such as current export controls and tariff increases, diplomatic and security considerations outweigh the logic of cost and efficiency. Therefore, when formulating frameworks for international cooperation and determining which countries to cooperate more closely with for AI technology development, it is inevitable to consider both internal technological conditions and diplomatic/security situations, making technological diplomacy crucial. This section specifically presents what the new government should pursue from the perspective of AI technology diplomacy.

First, let's examine the internal technological situation through AI semiconductors. In the case of South Korea's memory and system semiconductors, it relies on major manufacturing equipment and IP from the United States. The US market accounts for less than 10% of South Korea's semiconductor exports. The latest chip H100, used for running AI models, is designed by NVIDIA in the US and manufactured by TSMC in Taiwan. On the other hand, South Korea imports a significant portion of key raw materials such as silicon, germanium, and tungsten from China, and more than half of South Korea's semiconductors are exported to China (including Hong Kong). Samsung and SK Hynix have manufacturing facilities in China. If cooperation with the US is suspended, and South Korea is unable to receive semiconductor equipment and the latest chips, which are powerful cards held by the US, South Korea's semiconductor production and AI technology development will immediately halt. Conversely, a reduction in cooperation with China will disrupt South Korea's semiconductor production and exports. Thus far, China has needed South Korea's technology and semiconductor imports, so its pressure on South Korea has not been significant, but the fact that the proportion of South Korea's share in China's semiconductor imports is gradually decreasing is a problem. China's most threatening card is catching up to South Korea's semiconductor manufacturing technology. Over the past few years, US export controls have slowed down China's semiconductor manufacturing technology innovation, buying time for Korean companies. Considering these circumstances, the most important partner for South Korea's technology diplomacy will inevitably be the United States for the time being.

In terms of external technological factors, the relationship between the liberal world economic order and South Korea's security and prosperity is particularly noteworthy. South Korea's economic growth, which began in earnest in the 1970s, was based on the ROK-US alliance and the free trade order. South Korea's technological innovation capabilities were also enhanced under the US-led open global innovation system. Currently, with US-China competition and US export controls and tariff increases, the liberal world economic order is declining, and the globalization and innovation systems are becoming bloc-based, leading to side effects such as price increases, economic recession, and rising R&D costs. The South Korean economy is at the forefront of experiencing the shocks from the decline of the liberal economic order and the bloc formation of global supply chains and innovation systems, and it must work together to restore and reshape the rules-based liberal economic order for common prosperity in any form. In the so-called co-existence and co-prosperity liberal world economic order that we are building together for common prosperity, the United States is a more important partner for South Korea than any other country in terms of the complementary aspects of our economies. On the one hand, we must respond to US pressure, and on the other hand, we must cooperate with liberal democratic countries, including the United States, to seek the reshaping of the liberal world economy.

The United States is leading global AI technology development, possesses technologies that we lack, and is a partner with whom we must cooperate to reshape the liberal world economic order of co-existence and co-prosperity, making it the most important target of South Korea's technology diplomacy. The ROK-US launched the Next Generation Critical and Emerging Technologies Dialogue and the Korea-US AI Working Group, setting key areas of cooperation such as machine learning and AI development, international AI standardization, research cooperation, policy interoperability, and international AI governance; however, substantial cooperation has not yet materialized. In 2024, the US hosted the International Network of AI Safety Institutes meeting in San Francisco, where both countries are cooperating on AI model safety assessment and the development of international standards. The new government must support bilateral AI cooperation among various actors, including research institutes, universities, and companies, as well as at the government level, for AI technology development and safety.

In the context of an unstable international order, expanding cooperation in advanced technologies with the United States, an ally and holder of core technologies, is important. Especially as a counter-balance to pressure on defense costs or tariffs, we must proactively present and implement new technology cooperation agendas to the US, which may have weaker incentives for cooperation than we do. Currently, R&D budgets are being reduced under the US government's efficiency drive. In this context, we should expand bilateral cooperation focusing on areas that the Trump administration actively shows interest in and areas that can be utilized for containment of China. A system must be established to lead and monitor ROK-US advanced technology cooperation. While bilateral advanced technology cooperation in the past, focused on the purpose of science and technology itself, could be decentralized and pose no significant issues, in cases like the present, where advanced technology cooperation is pursued from the perspective of overall national security or foreign policy strategy, a central point of technological diplomacy is needed to comprehensively monitor and coordinate such strategic cooperation.

In the context of US-China competition, China's AI technological advancements compel us to deepen our considerations on how to conduct technological diplomacy with China, raising the need for more complex and multi-layered diplomatic capabilities. While the space for cooperation with China is indeed shrinking due to strengthened cooperation with the US, it is necessary to maintain channels for technological diplomacy with China and sow the seeds for future concrete cooperation. It is necessary to open the door for diplomacy with China by recovering and managing networks and cooperation between universities, research institutes, and companies, focusing on strategically less sensitive areas of science and technology.

With the acceleration of AI technology development, demands for ensuring safety and protecting personal information are increasing. South Korea, following the European Union, enacted the 'Framework Act on the Development and Dissemination of Artificial Intelligence and the Protection of AI and its Users' (commonly known as the AI Basic Act) in 2024. This law aims to promote the development and utilization of AI while simultaneously pursuing ethics, safety, and the establishment of a trustworthy ecosystem. It balances AI promotion and regulation, with key provisions including the mandatory establishment and updating of national AI strategies, risk-based AI classification and government response guidelines, expanded opening of public sector data, and the establishment of AI ethical principles and evaluation standards. International organizations such as the UN, OECD, UNESCO, and G7, as well as various countries including the US, China, the UK, the Netherlands, Singapore, and France, have proposed global AI norms and governance frameworks. South Korea is actively participating in GPAI (Global Partnership on AI), OECD AI Principles, G7 AI Process, and UN AI governance discussions. In 2024, it hosted the 'AI Seoul Summit' and proposed safety, innovation, and inclusion as values for AI governance through the Seoul Declaration. Having taken the initial step, it is crucial to continue participating in and leading global AI governance discussions that balance AI development and trust and aim to reduce the digital divide.

Amidst the growing influence of giant AI companies from the US and China and major powers, many countries are showing interest in developing Sovereign AI based on Large Language Models (LLMs) that manage their own data and infrastructure and reflect their local languages, cultures, and values. As a small number of big tech companies lead AI technological innovation, countries lacking their own independent platforms or LLMs are beginning to recognize the threats posed by AI outputs that do not reflect their national identity or interests. Consequently, strategies for building sovereign AI capabilities are being actively discussed, with a high demand for strengthening supercomputing capabilities and developing proprietary AI models. Attempts are being made, such as France's 'Mistral AI' and 'Le Chat,' Finland's 'Silo AI,' the UK's 'BritGPT' aiming to focus on British culture and history, and the development of Japanese-specific LLMs in cooperation with NVIDIA. Discussions on developing and expanding Korean-style sovereign AI are also actively underway domestically. Naver has developed 'HyperCLOVA X,' based on Korean language and reflecting Korean socio-cultural contexts, and is pursuing cooperation in developing sovereign cloud and sovereign AI optimized for the Middle East and Southeast Asian regions based on this. To solidify South Korea's influence in the global AI ecosystem, successful development and expansion of sovereign AI are crucial, requiring active government support. Furthermore, by expanding AI bilateral/multilateral cooperation with the Global South and presenting packages to support the comprehensive AI transition in the Global South, we must move forward. Currently, cooperation in the cybersecurity sector with the Global South, particularly ASEAN countries, is actively underway. In November 2024, South Korea and ASEAN were elevated to the status of Comprehensive Strategic Partners, and cooperation is progressing in various fields, including cybersecurity, defense, supply chains, and digital transformation. Building on this, cooperation in the AI sector should also proceed, expanding technological cooperation with developing countries through initiatives like the Korea-ASEAN Digital Flagship Project, and extending cooperation beyond ASEAN to the Middle East, Africa, and South America.

The starting point of South Korea's technology diplomacy lies in contemplating what kind of nation and world order we aim to build through artificial intelligence. This will inevitably differ from the directions pursued by the US, where big tech leads, or China, where authoritarian states drive AI development. If not the US model or the Chinese model, discussions on what constitutes the Korean model must be actively pursued to build social consensus. This is a core aspect of South Korea's future identity, encompassing not only the development of sovereign AI but also the content and values it will embody. Despite numerous warnings about the challenges and risks posed by artificial intelligence, the nature of the threat remains unclear. Lu Xun described a situation where hostile forces are surrounding, but a clear enemy cannot be found, where the distinction between friend and foe is ambiguous, and a clear front cannot be formed, as 'Mu Wu Zhi Zhen' (無物之陣 - a battle formation without objects). Artificial intelligence, an overwhelming, somewhat attractive, yet simultaneously threatening entity whose nature is not yet fully understood, is driving us into such a state. What is clear so far is that amidst the decline of the liberal world economic order that has supported South Korea's security and economic growth, the establishment of effective global AI governance to respond to AI threats is also uncertain. The reshaping towards a rules-based liberal world order of co-existence and co-prosperity, which is required for South Korea's sustained prosperity and security, can be a shared aspiration for many nations in an unstable and uncertain global order, not just South Korea's wish. Amidst the ongoing US-China hegemony competition, we must pursue technological diplomacy that, on the one hand, advances AI technology development and utilization with utmost effort, and on the other hand, identifies and jointly responds to the challenges and risks posed by US-China competition and artificial intelligence by gathering strength and forging solidarity, with a focus on reshaping the liberal world order of co-existence and co-prosperity and ensuring our security and prosperity. ■

■ Bae Young-jaProfessor, Department of Political Science and International Relations, Konkuk University.

■ Management and Editing:Song Chae-rin, EAI 연구원

    문의 및 편집: 02 2277 1683 (ext. 211) | crsong@eai.or.kr