S. Korea enacts landmark AI laws amid startup concerns
South Korea on Thursday introduced what it calls the world’s first comprehensive set of laws regulating artificial intelligence, aiming to bolster trust and safety in the sector. However, startups expressed concern that compliance requirements could slow innovation.
The AI Basic Act, now in effect in South Korea, is intended to position the country as a global leader in AI regulation. The legislation comes ahead of Europe’s phased implementation of the EU AI Act, which will continue through 2027, News.Az reports, citing Reuters.
Global approaches to AI regulation remain divided. The U.S. favors a lighter-touch framework to avoid stifling innovation, while China has introduced some rules and proposed a body to coordinate global oversight.
Key provisions of South Korea’s laws require companies to maintain human oversight over “high-impact” AI systems, including applications in nuclear safety, water production, transport, healthcare, and financial services such as credit evaluation and loan screening.
Other rules mandate that companies provide advance notice when using high-impact or generative AI, and clearly label AI-generated content when it is difficult for users to distinguish it from reality.
The Ministry of Science and ICT has said the legal framework was designed to promote AI adoption while building a foundation of safety and trust.
The bill was prepared after extensive consultation and companies will be given a grace period of at least a year before authorities begin imposing administrative fines for infractions.
The penalties can be hefty. A failure to label generative AI, for example, could leave a company facing a fine of up to 30 million won ($20,400).
The law will provide a "critical institutional foundation" for South Korea's ambition to become a top-three global AI powerhouse, Science minister Bae Kyung-hoon, a former head of AI research at electronics giant LG, told a press conference.
But Lim Jung-wook, co-head of South Korea's Startup Alliance, said many founders were frustrated that key details remain unsettled.
"There's a bit of resentment — why do we have to be the first to do this?" he said.
Jeong Joo-yeon, a senior researcher at the group, said the law's language was so vague that companies may default to the safest approach to avoid regulatory risk.
The ministry has said it plans a guidance platform and dedicated support centre for companies during the grace period.
"Additionally, we will continue to review measures to minimise the burden on industry," a spokesperson said, adding that authorities were looking at extending the grace period if domestic and overseas industry conditions warranted such a measure.
By Nijat Babayev
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