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Growth and Strategies of AI Industry in South Korea: Focus on Saltlux's AI Search Engine 'Goover'

GOOVER DAILY REPORT August 3, 2024
goover

TABLE OF CONTENTS

  1. Summary
  2. Current State of the AI Industry in South Korea
  3. Saltlux's AI Search Engine 'Goover': Development and Global Expansion
  4. Technological Trends and Regulatory Issues in AI
  5. Case Studies: AI Applications in Different Industries
  6. Market Competition and Strategic Movements
  7. Conclusion

1. Summary

  • This report delves into the current status and strategies of South Korea's AI industry, with a concentrated focus on Saltlux's AI search engine 'Goover.' It highlights the significant growth of the AI market, projected to expand from $1.83 billion in 2022 to $20.7 billion by 2032, driven by substantial government investment. Major AI entities like Saltlux and Diquest are pivotal, with Saltlux introducing advanced solutions like the LUXIA language models and expanding globally with its Goover search engine. The report also examines the influential role of the semiconductor sector and the regulatory landscape shaping the AI industry, alongside case studies showcasing AI applications in public services, healthcare, finance, and telecom sectors.

2. Current State of the AI Industry in South Korea

  • 2-1. Overall Market Growth

  • The AI market in South Korea is experiencing rapid growth. In 2022, the AI market size was approximately $1.83 billion, and it is predicted to reach $20.7 billion by 2032, with a compound annual growth rate (CAGR) of 27.5%. This growth is primarily driven by significant government investment and support.

  • 2-2. Key Players: Saltlux and Diquest

  • Several major companies are actively involved in the AI field. Saltlux, established in 2003, has developed innovative AI solutions including the LUCY AI platform and the ADAM AI assistant system. They saw a stock price decrease of 2.87% last week, reflecting the volatile market. Diquest, founded in 2000, specializes in natural language processing and search engines, offering products like Mariner3, Diver4, and BramstVOC, the latter being used for monitoring online reputations and risk management.

  • 2-3. Collaboration and Innovation

  • Saltlux has created several key AI technologies, such as the high-capacity language models LUXIA and LUXIA2, and the Goover AI search engine, which uses Graph RAG technology for precise search results. Saltlux has also made significant moves globally by launching the Goover AI search engine in both Korea and the United States simultaneously and establishing a subsidiary in Silicon Valley for local investment attraction. Additionally, Saltlux formed strategic alliances with NHN, where NHN acquired 678,000 shares of Saltlux and Saltlux obtained 94.95% of NHN Diquest's shares, boosting its market share from 23% to 35% in the AI search engine market.

3. Saltlux's AI Search Engine 'Goover': Development and Global Expansion

  • 3-1. Technological Innovations in 'Goover'

  • Saltlux's AI search engine 'Goover' is powered by the proprietary large language model 'Luxia2'. Luxia2 boasts double the training data of its predecessor Luxia1, enhancing its accuracy in answering queries. Notably, Luxia2 ranked first globally among LLM models under 35 billion parameters on Hugging Face's open LLM leaderboard. Goover supports multi-language processing, allowing users to access and utilize information from the global web without language barriers. The search engine addresses information overload by providing curated, personalized information through the use of its AI brain 'Connectome'. Connectome analyzes and filters large data sets to generate optimized deep reports automatically. Additionally, Goover employs Graph RAG (Graph Retrieval-Augmented Generation) technology to enhance search results by leveraging the structural characteristics of graph data, thereby improving the reliability and accuracy of information.

  • 3-2. Market Launch and Competitor Analysis

  • Initially launched on July 17, 2024, in both the United States and South Korea, Goover received positive feedback for its innovative features. Users particularly appreciated its personalized information delivery and automated deep report generation in contexts like financial investment, venture capital, marketing, strategic planning, research, and media. Despite competition from major players such as Google, Microsoft Bing, and the emerging startup Perplexity, Goover aims to differentiate itself with its advanced AI technologies like the 'Ask Goover' feature, large language model Luxia, and Graph RAG. These technologies enable Goover to deliver tailored information and generate in-depth reports, earning it favorable initial market reactions.

  • 3-3. Strategic Partnerships

  • Saltlux has formed several strategic partnerships to bolster its global competitiveness. On July 14, 2024, Saltlux's CEO Kyungil Lee announced a strategic alliance with NHN during the 'Saltlux: Opening the Future of AI' growth strategy presentation. NHN acquired a 5.69% stake in Saltlux, and Saltlux in turn acquired a 94.95% stake in NHN's natural language processing specialist company, NHN Dyquest. This partnership combines NHN's cloud infrastructure with Saltlux's generative AI capabilities to establish a domestic collaboration model akin to AWS, Anthropic, Microsoft, and OpenAI. Saltlux also partnered with Polaris Office on July 4, 2024, to integrate Luxia's LLM capabilities with Polaris Office's various generative AI technologies to co-develop AI-based document solutions, enhancing Polaris Office's B2B, B2G, and B2C offerings globally. Additionally, Saltlux has collaborated with Samsung Electronics, revealing the Luxia2 model—which enhances the performance of Samsung’s devices—and Pyidae Digital Healthcare to innovate AI-driven healthcare solutions using Luxia.

4. Technological Trends and Regulatory Issues in AI

  • 4-1. Semiconductor Industry’s Role in AI

  • The semiconductor industry plays a critical role in the AI ecosystem in South Korea. Companies like Samsung Electronics and SK Hynix are pivotal, especially with their development of high-bandwidth memory (HBM). For instance, Samsung is focusing on HBM4 development while SK Hynix is supplying HBM3E products. The introduction of NVIDIA's AI chip 'Blackwell' has further boosted demand for memory semiconductors, highlighting the intertwined relationship between AI advancements and semiconductor technology.

  • 4-2. Data Security and Ethical Considerations

  • As AI technology progresses, data security and ethical considerations become increasingly significant. Generative AI tools have raised issues related to copyright and the ethical handling of sensitive data. For example, legal disputes can arise from using AI-generated content as one's own, and sensitive data processing by generative AI tools necessitates stringent security measures and clear data usage policies. Additionally, phishing schemes using natural language processing and voice synthesis exemplify the potential for unethical uses of AI. Both legal measures and ethical education are essential in addressing these concerns.

  • 4-3. Regulatory Frameworks

  • The legal landscape for AI technology is evolving globally, with South Korea being no exception. Recent legislative updates, such as the copyright law amendments in 2021 and 2023, aim to introduce regulations addressing text and data mining (TDM). Internationally, the European Union is also legislating TDM specifics, while the United States relies on existing copyright laws to manage these issues. In South Korea, AI-related legal challenges include intellectual property disputes exemplified by AI's use in content creation, which has prompted recent strikes by Hollywood writers and actors to protect their work against unlawful AI use. These regulatory efforts highlight the ongoing challenge of ensuring AI technologies are deployed ethically and legally.

5. Case Studies: AI Applications in Different Industries

  • 5-1. Public Services and AI Chatbots

  • One notable case of AI in public services involves the Seoul Gangbuk-gu Office, where AI service company YouNP implemented an AI chatbot system using OpenAI's ChatGPT technology. This chatbot utilizes data from the Gangbuk-gu office website, Seoul's 120 Dasan Call Center, and other local government data to provide fast and reliable responses to public inquiries. The chatbot includes features such as source links for increased reliability and reduced hallucination effects. The system aims to offer residents convenient access to information and services, revolutionizing public service delivery.

  • 5-2. Medical and Financial Sectors

  • AI applications in the medical and financial sectors are advancing rapidly. In healthcare, AI-driven tools are used for personalized health management, condition prediction and analysis, and tailored health recommendations. Remote monitoring technology enhances real-time management of patient health through the collection and analysis of medical data. In the financial sector, while regulatory constraints limit extensive AI use by financial firms in South Korea, companies like KB Kookmin Bank are initiating AI projects for various services. Globally, banks like Bank of America utilize AI chatbots for personalized customer service, demonstrating the transformative potential of AI in finance.

  • 5-3. Telecommunication

  • The role of AI in telecommunications is exemplified by the initiatives of South Korea's major telecom companies. SK Telecom, KT, and LG Uplus have adopted AI-driven call centers and personal assistants that significantly improve operational efficiency and customer service. SK Telecom's 'NUGU' and KT's 'AICC' provide advanced voicebot and text analysis services, enhancing customer interaction and service quality. LG Uplus focuses on AI-powered network security and efficient system management through lightweight AI models. These AI systems are essential for managing the increasing complexity and customer demands in the telecom industry.

6. Market Competition and Strategic Movements

  • 6-1. Global AI Market Dynamics

  • The global AI market is undergoing significant evolution with the emergence of new AI-based search engines. OpenAI has introduced 'SearchGPT', an AI-based search engine that challenges Google's dominant position. This shift marks a transition from traditional keyword-based search to conversational AI search services, allowing users to obtain information more conveniently. The global search market, valued at approximately $120 billion, is seeing fierce competition as companies strive to capture market share. OpenAI's entry has already impacted Google, evidenced by a 3% drop in Google's stock price following the announcement of 'SearchGPT'. Additionally, other tech companies like Microsoft and the rapidly growing startup Perplexity have joined the competitive landscape. South Korean companies such as Naver and Saltlux are also exploring opportunities in this evolving market, aiming to introduce AI-driven search services that could potentially revolutionize the search industry.

  • 6-2. Major Players: OpenAI, Google, and Microsoft

  • In the fiercely contested global search engine market, major players include OpenAI, Google, and Microsoft. Google's dominance is evident, with a market share of 91.05% as of StatCounter's latest data and generating 76.3% of its total revenue from search service advertising. However, OpenAI's 'SearchGPT' poses a significant threat to Google, aiming to improve search processes significantly. OpenAI's proactive moves have already stirred the market with immediate financial implications for Google. Microsoft, a robust competitor, is also investing heavily in AI technologies, adding further competition to the mix. Diverse companies including new market entrants like Perplexity are intensifying the competitive landscape, indicating a dynamic market evolution driven by rapid technological advancements.

  • 6-3. South Korean Market Outlook

  • The AI search market in South Korea is gaining momentum with companies like Saltlux and Naver taking bold steps towards innovation. Saltlux has developed 'Goover', an AI-based search engine designed to handle natural language queries and provide deep web search results, addressing the information overload problem. Goover uses advanced language models like Lucia (8B, 13B) to deliver accurate and comprehensive search results. This AI search service, launched in both South Korea and the United States, is part of Saltlux's strategy to establish a strong presence in the global market. Concurrently, Naver is also aiming to transform the search paradigm in South Korea. Collectively, these developments indicate a promising yet competitive outlook for the South Korean AI market, especially in AI search technologies.

7. Conclusion

  • The AI industry in South Korea is poised for substantial growth, largely fueled by innovative efforts from companies such as Saltlux and Diquest. Saltlux's Goover search engine exemplifies cutting-edge AI technology that successfully integrates advanced language models and Graph RAG technology to deliver precise search results. The industry benefits from the robust semiconductor sector, with key players like Samsung and SK Hynix driving advancements that support AI infrastructure. Nonetheless, regulatory and ethical challenges, particularly concerning data security and intellectual property, require ongoing attention. For future development, continuous innovation, strategic global partnerships, and careful navigation of regulatory landscapes will be critical. Real-world applications of these technologies, notably in public services, healthcare, and telecommunications, suggest substantial practical benefits, making this a dynamic and impactful industry that demands close watch as it continues to evolve.

8. Glossary

  • 8-1. Saltlux [Company]

  • Saltlux is a leading South Korean AI company known for its AI search engine 'Goover.' It is a key player in the AI industry, focusing on natural language processing and global market strategies.

  • 8-2. Goover [Product]

  • Goover is an AI search engine developed by Saltlux. It utilizes advanced technologies like the 'Luxia' language model and 'Connectome' technology to provide personalized searches and in-depth reports.

  • 8-3. Diquest [Company]

  • Diquest is a notable company in South Korea's AI industry, recognized for its achievements in natural language processing and search engine technologies.

  • 8-4. NHN [Company]

  • NHN is a South Korean IT company that has formed strategic alliances with Saltlux to enhance cloud infrastructure and AI services.

9. Source Documents