Seoul: Naver and Kakao, South Korea's leading online platform companies, along with gaming titan NCSOFT, have decided not to participate in the second round of a state-led competition aimed at developing a domestic artificial intelligence (AI) foundation model, as per industry sources.

According to Yonhap News Agency, on Thursday, the science ministry disclosed a shortlist of three contenders, led by SK Telecom Co., LG AI Research, and Upstage, to advance in the competition for creating a proprietary AI foundation model. Unfortunately, Naver Cloud Corp. and NC AI Co. did not make the list, and a consortium led by Kakao Corp. was eliminated during an earlier stage.

Following the announcement of the selected candidates, the ministry revealed plans to choose an additional consortium for the competition, allowing previously eliminated teams to reapply. Despite this new opportunity, Naver and Kakao seem reluctant to reenter the competition.

A Kakao official stated, "We have no plans to reenter the race for the homegrown AI foundation model." Similarly, the consortium led by Naver expressed respect for the ministry's decision and confirmed they would not seek to reapply. The consortium led by NC AI also decided against making a second attempt, focusing instead on developing industry-specific AI technologies.

Industry observers suggested that the absence of Naver, Kakao, and NC AI in the second round could impact the momentum of the government's "repechage" initiative. An industry representative noted the risks and unclear benefits associated with re-engaging in such a competitive environment.

An AI foundation model is a large-scale system trained on extensive data, adaptable for multiple tasks. The government aims to support the development of these models to position the country as a leading AI powerhouse globally.

Other teams that did not progress to the initial five candidates included those led by KT Corp. and the Korea Advanced Institute of Science and Technology.