Alarm bells ring for S.Korean IT firms' ChatGPT craze

The global popularity of ChatGPT is driving South Korean startups to launch a string of new services linked to the artificial intelligence-powered language model, a trend that industry watchers and venture capitalists warn could further deepen their reliance on foreign technologies.  

With Korean IT giants yet to develop AI technologies comparable to ChatGPT, the AI-driven chatbot may change the landscape of the Korean startup industry as Microsoft Corp.-backed OpenAI has been swiftly upgrading the language model.

Unveiled in November 2022, ChatGPT can generate human-like text to conversate with humans and reply to questions.

“Innovative technologies like ChatGPT present new business opportunities in their introduction phase,” said Ahn Sung-won, head of AI policy research at South Korea’s Software Policy & Research Institute.

“But they may lead us to be shackled to the technologies developed by foreign companies. We need to develop competitive AI platforms optimized for the domestic industry ecosystem.”  

Despite such concerns, Korean startups are in a hurry to add ChatGPT to their products.

“A soaring number of startups are coming with business ideas linked to ChatGPT,” a Korean venture capital company head told The Korea Economic Daily.

“They may end up being swayed by OpenAI’s business direction in the future.”

Hard lessons may be learned from app developers' reliance on Apple and Google.

Mobile apps developed by domestic companies are offered mainly by Apple and Google app stores. In return, they offer 30% of payments made within the apps as a fee to the Big Tech firms.

By comparison, it costs only $0.002 for ChatGPT to process 750 English words. But industry watchers warn that OpenAI could raise the fees down the road.

“It is not a big sum of money for startups in their early phase,” said one of the industry officials. “But once the ChatGPT-based services take off, OpenAI will likely increase prices gradually by upgrading the chatbot models.”

Wanted Lab Inc., a recruiting portal, on Wednesday unveiled its ChatGPT-linked “AI community manager.” It uses AI to provide personalized job recommendations and learning programs.

AI technology startup Bigpearl upgraded its news platform to the OpenAI’s GPT-3.5 version earlier this week.

“Thanks to ChatGPT, we’ll be able to quickly answer various questions from beginners about our coding programs and review coding data,” said an official of TeamSparta, a coding education startup. “We are satisfied with it.”

To facilitate GPT adoption by a broader range of companies and to external programs, OpenAI makes the application programming interface (API) more accessible, so that its users can connect the API to external programs.

DIFFERENTIATION

To prevent global tech platforms from dominating South Korea’s AI startup ecosystems, industry watchers recommend they need to cater to Korean language users with customized services and by utilizing the vast amount of their data based on the local language.

But the recently released GPT-4, an upgraded version, boasts greater proficiency in Korean compared to its predecessor GPT-3.5, making it even more difficult for Korean companies to catch up with global AI platforms.

Write to Joon-Wan Kim and Seung-Woo Lee at By kjw@hankyung.com

Yeonhee Kim edited this article.