South Korea to Enforce AI Regulation

South Korea is set to implement a landmark artificial intelligence regulatory framework on January 22, according to industry sources, positioning the country to become the first in the world to enforce a comprehensive national AI governance law.

The new Artificial Intelligence Framework Act calls for the establishment of a National AI Committee, the adoption of a three-year master plan for AI development, and the introduction of strict safety and transparency requirements. 

These include disclosure obligations for certain AI systems and measures aimed at improving accountability in the rapidly expanding sector.

South Korea’s Yonhap News Agency reported that, if enforced as planned, the law would make the country a global first mover in comprehensive AI regulation. The government says the initiative is designed to enhance safety, transparency, and public trust in artificial intelligence technologies.

However, the proposed rules have sparked widespread concern among startups and industry groups, who warn that rigid regulations could slow innovation and place a heavy compliance burden on smaller companies.

The European Union was the first bloc to pass AI-related legislation, but it plans to implement most of its rules starting in August, with some provisions delayed until 2027 amid growing pressure from businesses and intensifying global competition.

An official from the Korea Internet Corporations Association said companies may not have sufficient time to prepare for the new rules, noting that the enforcement decree is expected to be finalized only shortly before the law takes effect due to procedural requirements.

A survey conducted by the Korea Startup Alliance found that 98 percent of 101 domestic AI startups have not yet established compliance response systems for the new law. Of those surveyed, 48.5 percent said they were unaware of the legislation and unprepared, while another 48.5 percent said they were aware of it but still unprepared.

Industry officials warned that if the current implementation timeline is maintained, some companies may be forced to modify or suspend services abruptly after January 22. They added that overly strict regulations could encourage companies to launch AI services overseas rather than domestically.

Market observers say regulatory pressure is already prompting a growing number of South Korean AI startups to consider relocating operations to Japan, which has adopted a more flexible and voluntary approach to AI governance.

Mandatory watermarking rules, which require AI-generated content to be clearly labeled, have emerged as a particular point of concern. While experts acknowledge the need to combat deepfakes and other forms of misuse, companies fear unintended consequences.

An executive at an AI content firm said that even AI-generated material often requires hundreds of people to improve quality, but consumers may reject such content once it is labeled as AI-generated. The executive added that labeling requirements remain unclear and questioned whether the views of industry specialists and content creation experts were fully considered during the policy process.