Korean AI startup quality surges as US infrastructure boom creates opportunities

JP Lee, CEO and managing partner of South Korean venture capital firm SBVA, says the quantity of Korean AI startups has decreased but their quality has dramatically improved. Lee views the massive US investment in AI infrastructure as a significant opportunity for Korean startups to capitalize on, particularly as SBVA focuses on investing across the broader AI ecosystem beyond just large language models and applications.

What you should know: SBVA is positioning itself to leverage the AI infrastructure boom happening in the United States to benefit Korean startups.

• The venture capital firm is taking a strategic approach by investing across the entire AI ecosystem rather than focusing narrowly on large language models or consumer applications.
• Lee believes this broader investment strategy allows Korean companies to find unique opportunities in the rapidly expanding AI market.

The big picture: The Korean AI startup landscape is undergoing a quality-over-quantity transformation that could position it well for the current AI investment cycle.

• While fewer AI startups are emerging from Korea compared to previous years, those that do launch are demonstrating higher quality and more sophisticated approaches.
• This shift coincides with unprecedented investment in AI infrastructure in the US market, creating potential synergies for Korean companies with the right positioning.

Why this matters: Korea’s focus on startup quality over quantity could help its AI companies compete more effectively in a crowded global market.

• As the AI space becomes increasingly competitive, having fewer but higher-quality startups may prove more sustainable than the previous model of numerous early-stage companies.
• The strategic timing aligns with significant capital deployment in AI infrastructure, potentially giving well-positioned Korean startups access to resources and partnerships that weren’t previously available.