South Korea’s tech industry has repeatedly voiced complaints about the new artificial intelligence law, which is scheduled to take effect in January. With the law set to go into effect in less than a month, the tech industry has been vocal about the need for clearer requirements.
The AI Basic Law is scheduled to come into effect on January 22nd, but the bill has faced criticism from all angles within the industry. Most industry participants argue that the law remains vague and difficult to implement.
The Decree was recently finalized on November 12th after a 40-day legislative period.
South Korean tech industry voices concerns
South Korean technology companies are discussing how much time they have to prepare before this law takes effect. While lawmakers have hailed the bill as the first national law governing AI, the industry is concerned about provisions governing “high-impact AI.”
This is defined as a system that may pose a significant risk to life, safety, or fundamental rights and requires disclosure if the content is generated using artificial intelligence.
According to a Korean company official, the situation is like being told to “build a building without drawings.” Under the new law, companies that provide AI services will need to evaluate in advance whether their technology falls under the law. However, the companies point out that guidelines for this category remain broadly defined.
The law defines a scope that includes energy supply, biometric data used in criminal investigations, and other areas that affect human life and physical safety. Companies that fall into these categories are considered high-impact AI companies and must follow requirements such as mandatory risk management measures.
Startups are likely to be the most affected by the new law, said Jeong Joo-young, senior policy analyst at Startup Alliance.
He noted that the level of requirements to be followed is higher than general AI requirements. Ju-yeon also added that sectors where startups are active, such as healthcare and education, could easily fall into that category. He said companies will try to avoid many of these areas due to legal risks.
Recent research shows that only about 2% have a concrete response plan in place, and 98% say they don’t have a concrete compliance strategy.
Large companies face similar challenges. One executive said the law would require companies to create a compliance framework unique to South Korea. He said the situation could delay the launch of new services in the country. The executive added that companies need to create legal frameworks that apply only to a country, adding that ecosystems thrive on relationships.
The executive stressed that it is difficult for companies to know how to prepare as the deadline approaches and requirements remain unclear. He added that the company plans to suspend the launch of some products in South Korea for the time being.
Additionally, the requirement to label AI-generated content has caused an uproar in the industry, with officials questioning whether the law protects users even if AI-generated content is labeled.
Meanwhile, the South Korean government plans to suspend fines under the AI Basic Law for one year next year to reduce potential side effects on companies. On the other hand, both companies have pointed out that the latest measures do not resolve their concerns.
According to industry insiders, negative factors such as complaints could hinder management decisions and operations.
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