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Following the initial assessment of the “National Representative AI” project, industry experts anticipate that SK Telecom and Upstage will battle for the last remaining position among the top two teams. LG AI Research, which showcased exceptional performance in the first evaluation, is expected to claim the first place, leaving the two companies to compete for the second spot. Although the government announced it would include an additional team for the second evaluation via a public selection, it is difficult for new participants to match the level of LG AI Research, SK Telecom, and Upstage, which started their development in August of last year. “If Naver Cloud had continued in the competition, both SK Telecom and Upstage might have faced difficulties reaching the final two,” said an AI industry insider. “However, with Naver’s withdrawal, both companies now have a better chance of making it to the end.”

◇SKT Surmounts Hacking Challenge Using Artificial Intelligence

When SK Telecom was first chosen as a National Representative AI team in August of last year, there were doubts: “Can a telecommunications company stand out in an area led by AI companies?” Among the five selected groups, SK Telecom was the only one without an AI focus. Nevertheless, following the initial assessment, the industry’s response changed: “We now view SK Telecom in a new light.”

SK Telecom created an AI foundational model that outperformed its rivals in size. In August of last year, Ryu Young-sang, the CEO of SK Telecom, made a public commitment to develop a 500-billion-parameter AI model—a milestone the company successfully reached for the first time within the country (519B). LG AI Research’s model contained 236B parameters, whereas Upstage’s had 100B.

At first, the AI sector was skeptical about SK Telecom’s bold goal. A model with 500B parameters was considered unattainable due to South Korea’s constraints in AI infrastructure. Some questioned whether the company would focus more on size than effectiveness. Nevertheless, SK Telecom shared the top position with LG AI Research in the National Information Society Agency (NIA) test, achieving a score of 9.2 out of 10. An insider from the telecom industry stated, “SK Telecom received comprehensive support from the group to restore its damaged reputation following a cyberattack through AI.” For the next assessment, SK Telecom intends to enhance its capabilities to include multimodal functions, allowing the model to handle various data formats such as images, audio, and video.

◇Upstage’s Corporate Value Skyrockets

Being the sole startup within the National Representative AI teams, Upstage experienced a significant increase in recognition and corporate value because of the project. Although it did not have the resources, workforce, or organizational capabilities of LG, SK, NC, and Naver, the company successfully passed the initial evaluation thanks to its strong technical skills. In individual benchmark tests, it achieved a perfect score of 10, matching LG AI Research.

The key advantage of Upstage lies in its flexibility, as the entire team operates in unison under CEO Kim Seong-hoon. When accusations emerged last year suggesting that Upstage had imitated a Chinese model, Kim quickly arranged a public review session the following day, effectively resolving the issue. The startup’s quick decision-making and openness received commendation from AI specialists. Upstage is now preparing for the second assessment. A company representative stated, “For the second evaluation, Stanford University and New York University will join our group, allowing us to enhance our technological skills. Our goal is to develop a world-class model that outperforms major technology companies.”

Upstage’s impressive showing in the National Representative AI competition has also improved its chances for an initial public offering (IPO). An insider from the investment industry stated, “We believe Upstage is aiming for an IPO as early as the second half of this year. If it makes it to the final two, it might establish a new record as the most successful domestic AI startup IPO.” The company’s corporate valuation is estimated at 2 trillion South Korean won.

In the meantime, AI startups Motif Technologies and Trillion Labs have shown interest in joining the further public offering for the National Representative AI initiative.