r/hardware • u/self-fix • 2d ago

News South Korea makes AI investment a top policy priority to support flagging growth

https://www.reuters.com/world/asia-pacific/south-korea-makes-ai-investment-top-policy-priority-support-flagging-growth-2025-08-22/
27 Upvotes

78% Upvoted

19 comments sorted by

20

u/Wander715 2d ago

Bold of them to do this right as there are signs of the AI bubble bursting

6

u/clamsoupz 1d ago

South Korea is one of a handful of countries that has already reaped great rewards from AI. It's a no brainer to invest more in both hardware and software.

27

u/LAwLzaWU1A 2d ago edited 2d ago

What signs? I ask this because a lot of times people see what they want to see, not necessarily what is actually happening. Just saying "I see signs" doesn't mean much without examples.

Also, even if it's a bubble about to burst doesn't mean it won't make some a lot of money. The Internet was a bubble (dot-com bubble), yet a lot of today's biggest companies were part of it.

I am sure that the people looking into this have done an analysis and decided it is worth risking. They didn't just wake up one day and went "maybe we should invest in this. It passes my vibe check". The risk to reward ratio might be very favorable.

8

u/jigsaw1024 2d ago

I think people are pointing to an MIT report that came out recently that pointed out that most of the investment in AI so far has failed to yield any real returns.

Also: the current investments are very much a risk v. reward thing at this stage, because the risk is that if/when AI starts to make returns, if they didn't do investments now, they won't get those returns in the future. The problem is that the returns until that potential payoff aren't much better than just burning money in a furnace.

18

u/Hot-Train7201 2d ago

Most investments in emerging fields tend to fail. The dot.com bubble bursting didn't kill the internet though.

8

u/LAwLzaWU1A 2d ago

If you're talking about the report from MIT's NANDA initiative then it is far more nuanced than that, and might not be applicable in this scenario. That report doesn't just say "95% of all AI things are a waste of money". It found that 95% of the generative AI pilots haven't shown measurable P&L impact yet. There are some things to consider with that report.

  1. They looked at pilots, which is often small scale tests. It is not uncommon that pilots fail even in very well established areas. If you want an analogy, someone making a recipe for a cook book might make the same dish with slight variations 10 times in order to find the best combination. That doesn't mean "we should try and make new dishes because 9 out of 10 fail".
  2. One success can greatly outweigh tens of failures. In the case of the dot-com bubble there were thousands of web companies that all went under, but those who invested in companies like Amazon and Google more than made their money back.
  3. The same study found that 67% of the pilots where companies purchased AI tools from specialized vendors and built partnerships were successes. So the report doesn't say "investing in AI is a waste of money". It says "you have to consider how you invest".
  4. Just because something hasn't made a return yet doesn't mean it won't in the future.

All investments are a risk vs reward thing. Waiting for guaranteed ROI before investing is how you guarantee you don't get any ROI.

4

u/opticalsensor12 2d ago

The thing is, isn't that just the basis of early stage investments?

I'm sure if you look at a venture capitalists portfolio, less than 10 percent of companies actually make it anywhere, across any industry.

1

u/new-ashen-one 12h ago

Completely agreed. There are so many applications that the average consumer don’t see where AI is being pivotal. It will most likely continue to increase

6

u/ML7777777 2d ago

The bubble isn't 'bursting'. The industry and its players are going to consolidate or be forced out. AI isn't going away, lol.

11

u/LAwLzaWU1A 2d ago

I think AI could be a bubble that might burst. Not sure if we are close to it bursting or not but it might happen. It being a bubble isn't the same as being a fad though. A bubble is just that a lot of investments are made into companies that get a really high valuation which then drop like a rock in value (making the invements lose a lot of value). It almost always happens when a new revolutionary market emerges.

When cars first came out it became a bubble. There were a ton of car companies that got started in the US and only a handful ended up being worth something 10 years later. Same with railroads, televisions, radio and so on.

1

u/tooltalk01 1d ago edited 1d ago

New political administration in South Korea. The ministry of South Korea's economics strategic planning is filled with real-estate folks and political appointees who couldn't care less about the country's core tech industry, much less AI. Just a big empty announcement.

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u/xternocleidomastoide 2d ago

Yeah, AI is another silly fad like the internet!

-4

u/Zestyclose_Plum_8096 2d ago

i really hope your trying to be ironic

#WillCodeHTMLForFood

1

u/DerpSenpai 2d ago

That's the software side but not the hardware side, even if software went cooked. We would still see investments into making an accelerator that can run the fat models on 1 card

-3

u/heickelrrx 1d ago

AI is essential for South Korea, especially since they haven't been on Peace with NK for military use, AI is essential for modern warfare

1

u/KillerxKiller00 1d ago

AI can help nullify the nuclear threat by targeting fixed silos and mobile launchers or the missiles themselves if they are already up in the air for interceptor SAM systems.

0

u/Exist50 1d ago

NK isn't a meaningful military threat beyond the possibility of nukes.

2

u/DateMasamusubi 2d ago

This doesn't just include LLM's like ChatGPT but also fields like image processing. Then there is the overhauling for VC funding (very welcome) and power grid upgrades, robots, etc.