South Korea has taken a bold step into the future of artificial intelligence regulation by enacting the AI Basic Act, formally known as the Framework Act on Artificial Intelligence Development and Establishment of a Foundation for Trustworthiness. With this landmark legislation, South Korea positions itself as a global frontrunner in AI governance, combining innovation with a commitment to safety and trust.

The Act’s comprehensive framework seeks to balance the growth of a competitive AI industry with the imperative of managing the societal risks posed by these transformative technologies. According to the words of the Minister of Science and ICT, Yoo Sang-Im, "Amid the intense global competition for AI, enactment of the AI Basic Act is a crucial milestone for Korea to truly take a leap forward as one of the world's top three AI powers, resolving corporate uncertainty and stimulating large-scale public-private investment." (source: Korea.net)

1. Key Provisions of the AI Basic Act

The AI Basic Act introduces a structured framework to regulate and promote AI development while safeguarding public interest. It achieves this by setting clear definitions and providing regulatory guidelines tailored to the complexities of modern AI systems.

At its core, the Act defines key concepts in AI governance. General AI systems form the foundation, while high-impact AI—such as those affecting human safety, health, or fundamental rights—are subject to additional scrutiny due to their significant societal implications. Generative AI, characterized by its ability to produce creative outputs like text, images, or videos, is distinguished for its potential to influence public perception and its susceptibility to misuse. The Act also categorizes businesses into “development” and “utilization” entities, providing a structured approach to compliance responsibilities.

The Act’s scope is notably far-reaching, covering activities conducted abroad that affect Korea’s domestic market or users. This extraterritorial application underscores its ambition to regulate AI comprehensively. However, AI systems developed exclusively for national defense or security purposes are exempt, as specified under a Presidential Decree.

High-impact AI systems face stringent requirements, including pre-launch evaluations, robust risk management strategies, mandatory human oversight, and detailed documentation to demonstrate compliance. These measures aim to mitigate risks while maintaining transparency and accountability. Generative AI systems, on the other hand, must meet distinct obligations, such as clear labeling of AI-generated content to prevent misuse or deception, particularly when mimicking real-world elements.

2. Supporting AI Industry Development

The Act champions AI innovation through state-backed initiatives that seek to address foundational challenges. Training data—the lifeblood of AI—receives focused attention, with plans to streamline its production, management, and distribution. The establishment of AI Data Centers is prioritized, supported by financial and administrative incentives to bolster computing infrastructure.

Recognizing the global race for AI talent, the Act also emphasizes workforce development. Initiatives aim to attract international expertise while fostering local talent, ensuring South Korea remains competitive on the global stage. Special provisions for small and medium-sized enterprises and start-ups underscore the government’s intent to democratize AI adoption.

3. Compliance and Enforcement Framework

The Ministry of Science and ICT (MSIT) is entrusted with ensuring compliance and handling violations. The regulatory framework is firm but measured, balancing enforcement with flexibility. For instance, businesses deploying high-impact AI must seek prior verification of safety measures and prepare for potential audits. Foreign AI providers are also drawn into the regulatory fold. Those meeting user or revenue thresholds must appoint a local representative in South Korea, responsible for compliance oversight and liaising with the MSIT. Failure to comply invites administrative penalties, but the Act avoids overly punitive measures that could deter innovation.

South Korea’s AI Basic Act is set to take effect in January 2026, following a one-year preparation period after its promulgation.