Seoul: Naver and Kakao, South Korea's two leading online platform brands, have decided not to participate in the second round of a government-led competition aimed at developing a homegrown artificial intelligence (AI) foundation model, industry sources revealed on Friday.

According to Yonhap News Agency, the science ministry announced on Thursday a shortlist of three teams that will advance to the second round of the competition to create a proprietary AI foundation model. Notably, Naver Cloud Corp. and NC AI Co. were not among those selected. Additionally, a consortium led by Kakao Corp. was previously eliminated in an early stage of the competition.

Following the announcement of the shortlisted candidates, the ministry introduced a new plan to select an additional consortium for the competition, allowing previously dropped teams to reapply. Despite this opportunity, Naver and Kakao have shown reluctance to reenter the race. A representative from Kakao stated, "We have no plans to reenter the race for the homegrown AI foundation model." Meanwhile, the consortium led by Naver expressed respect for the ministry's decision and confirmed it would not pursue a renewed bid. However, the consortium led by NC AI is still contemplating a second bid.

An AI foundation model is a large-scale system trained on extensive data, adaptable for a variety of tasks. The government's initiative aims to cultivate homegrown models as part of its strategy to position the nation among the world's top three AI powerhouses. Other teams that did not advance to the initial five candidates include those led by KT Corp. and the Korea Advanced Institute of Science and Technology.