South Korea introduces landmark AI law

Aiming to become one of the world’s top three AI powerhouses, South Korea is hoping that its new AI Basic Act will help position the country as a leader in the field

South Korea introduced on Thursday the world’s first comprehensive set of laws regulating artificial intelligence, aiming to strengthen trust and safety in the sector, but startups fretted that compliance could hold them back.

Aiming to become one of the world’s top three AI powerhouses, South Korea is hoping that its new AI Basic Act will help position the country as a leader in the field. The laws in their entirety have taken effect sooner than laws in other parts of the world such as the EU’s AI Act which is being applied in phases through 2027.

Global divisions remain over how to regulate AI, with the U.S. favouring a more light-touch approach to avoid stifling innovation. China has introduced some rules and proposed creating a body to coordinate global regulation.

Under South Korea’s laws, companies must ensure there is human oversight in so-called “high-impact” AI which includes fields like nuclear safety, the production of drinking water, transport, healthcare and financial uses such as credit evaluation and loan screening.

Other rules stipulate that companies must give users advance notice about products or services using high-impact or generative AI, and provide clear labelling when AI-generated output is difficult to distinguish 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 in South Korea, for example, could leave a company facing a fine of up to 30 million won ($20,400).