South Korea has announced plans to implement a new set of regulations targeting the artificial intelligence industry in the country. According to reports from local media, the new regulations are set to be implemented next month and come amid concerns among businesses in the industry. Startups and businesses in the South Korean artificial intelligence sector have been calling on the government for a while. According to reports from industry sources, they have noted that the current regulations concerning the industry could stifle its growth and create an unnecessary burden on smaller firms. The AI framework act is expected to take effect on January 22, 2026, putting the needed guardrails into place to ensure the industry excels. South Korea set to implement AI framework in January According to industry sources , the national AI framework act, which is expected to take effect in January, will call for the establishment of a national AI committee, the formulation of a basic three-year AI plan, and the imposition of safety and transparency requirements, including disclosure obligations for some AI systems. If implemented, Korea would become the first country in the world to enforce a comprehensive AI regulatory framework. The European Union was the first to pass a regulation concerning artificial intelligence. However, it has plans to start applying most of the rules starting in August, with other provisions expected to be delayed until 2027. The regulations are also coming amid mounting pressures from businesses and firms as the global artificial intelligence race continues to heat up. “Companies may not have sufficient time to prepare for the new rules, as the enforcement decree is expected to be finalized only shortly before the law takes effect due to procedural requirements,” an official from the Korea Internet Corporations Association said. “This will be particularly overwhelming for startups.” AI startups grumble at the regulatory requirements A recent survey carried out by Startup Alliance showed that 98% of the 101 local AI companies said they have yet to establish a response system to comply with the new law. During the survey, 48.5% of the respondents mentioned that they were unfamiliar with the law and unprepared, while another 48.5% mentioned that they were prepared for the law, but were still not adequately prepared for it. “If the current implementation timeline is maintained, some companies may be forced to abruptly change or suspend services after Jan. 22,” another industry official said. The official mentioned that if the regulations are too strict, companies will have incentives to launch services overseas rather than in Korea. Meanwhile, industry watchers have noted that regulatory pressure is one of the major reasons why most Korean AI startups are considering Japan, which is looking at a softer approach. The worrisome aspect of the regulation is the mandatory watermarking rules that would require AI-generated content to be labeled to curb deepfakes and other forms of misuse. “Even AI-generated content often involves hundreds of people working to improve quality, but consumers may turn away once they are labeled as ‘AI-generated,'” an official at an AI content company said. The official also highlighted the unclear requirements concerning labeling, noting that the government did not take into consideration the views of those who fully understand content creation and other relevant experts. Meanwhile, this development comes as Korea joined other partners to sign a Pax Silica declaration. The development will ensure the countries involved will work together in building a trusted supply chain ecosystem for AI, critical minerals, and other areas. Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.
