The South Korean tech industry has reiterated its complaints about the new artificial intelligence law, which is expected to take effect in January. With the law set to go live in less than a month, the tech industry has voiced out the need for clearer requirements.
The AI Basic Act is expected to go live on January 22, with the legislation facing criticism from all angles in the industry. Most industry participants are claiming that the law remains vague and its practice will be hard to implement. The decree recently underwent a 40-day legislative period, which was finalized on November 12.
Tech companies in South Korea have expressed concerns about the limited time to prepare before the law takes effect. While lawmakers are hailing the legislation as the first-ever nationwide law governing AI, the industry is particularly worried about provisions governing “high-impact AI.” This category includes systems that could pose significant risks to life, safety, or fundamental rights and mandates disclosure when content has been generated using artificial intelligence.
According to an official at a Korean firm, the situation resembles being asked to construct a building without a blueprint. Under the new law, companies dealing in AI services will need to assess in advance whether their technology falls into the high-impact category. However, firms have noted that guidelines defining this category remain broadly defined.
The law specifies that high-impact AI encompasses areas such as energy supply, biometric data used in criminal investigations, and other sectors directly affecting human life or physical safety. Any company classified within these areas will need to adhere to strict requirements, including mandatory risk management measures.
Jung Ju-yeon, a senior policy analyst at Startup Alliance, emphasized that startups could be among the most affected by the new law. She pointed out that the compliance requirements for them are substantially higher than those for general AI services. Ju-yeon also mentioned that sectors where startups are active, including health care and education, could easily fall under this high-impact classification, prompting many to reconsider their involvement due to the associated legal risks.
A recent survey indicated that only about 2% of firms were preparing concrete response plans for the new law, while a staggering 98% reported having no clear compliance strategy in place.
Larger firms face similar challenges. According to an executive from a major tech company, the legislation would necessitate the development of Korea-specific compliance frameworks. He noted that this scenario could delay the launch of new services in the country, as companies grapple with legal frameworks tailored only to South Korea, which disrupts established business relationships.
The executive highlighted the pressing deadline and the unclear requirements, stating that it remains difficult for companies to know how to prepare adequately. He indicated that his firm plans to pause the launch of several products in Korea until more clarity is achieved.
In addition, the law’s requirement to label AI-generated content has stirred controversy in the industry, with officials questioning whether such labeling would genuinely protect users against potential harm from AI-generated materials.
Meanwhile, the Korean government has announced plans to suspend fines under the AI Basic Act for the next year to mitigate the potential negative impact on businesses. However, industry insiders have asserted that this move will not alleviate their concerns. An industry official warned of the possibility that complaints and other adverse effects could significantly hinder business decisions and operations.
As the January deadline approaches, the South Korean tech industry continues to call for more precise guidelines and a collaborative approach to ensure that the AI Basic Act fosters innovation while safeguarding public interests.
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