While the sweeping early success of the Chinese artificial intelligence app DeepSeek has stirred concerns over privacy and security risks in many countries, not everyone is worried, with many in South Korea viewing the development as a boost to the country's efforts to keep up with the global AI innovation race. Investors in South Korea welcome DeepSeek's success story as offering hope to mostly low-budget startups in one of the world’s closest trade and business partners to China. Experts also say the development may underscore South Korea’s strategic importance for the Donald Trump administration.
The sweeping early success of the Chinese artificial intelligence app DeepSeek has stirred concerns over privacy and security risks in many countries. However, not everyone is worried, with many in South Korea viewing the development as a boost to the country's efforts to keep up with the global AI innovation race.An increasing number of public and private entities in many countries have blocked DeepSeek within worksites due to privacy and security risks. Regulators in several countries, including South Korea, have asked DeepSeek developers in China for information on how they collect and handle data, as well as the types of data collected.
Meanwhile, investors in South Korea welcomed the success story of DeepSeek for offering hope to mostly low-budget startups in one of the world’s closest trade and business partners of China. Experts also say the developments may underscore South Korea’s strategic importance for the Trump administration.
— Blocked, restricted, or warned —
In just a few days after DeepSeek launched a generative AI service similar to ChatGPT’s chatbot in late January, it emerged as one of the most downloaded apps in many countries, impacting global stock markets and perceptions of the global AI landscape.
During its first week of service, DeepSeek rose to the second-most popular app in South Korea, attracting 1.21 million smartphone users, according to market analysis company Wiseapp/Wiseretail. It trailed far behind ChatGPT, with 4.93 million users, but surpassed others like Perplexity and Microsoft Copilot.
However, the sweeping popularity of the Chinese app has raised concerns about data privacy and security risks, primarily due to the fact that there is far more unknown than known about the way Chinese companies operate and are regulated, in comparison to those in the Western world.
In South Korea, many government agencies, law enforcement authorities, and private companies blocked DeepSeek from their worksites this week, emphasizing that the app’s privacy and security practices have not been “confirmed to be safe,” according to major local news media reports (see here).
The move came after the Ministry of the Interior and Safety, along with the National Intelligence Service, issued a warning to public-service workers soon after the country returned from a nearly week-long public holiday. The warning was issued against Gen AI services without identifying any specific brands, but it came amid rising concerns about risks associated with DeepSeek.
As jurisdictions such as Italy, Australia, the US, India, Japan and Taiwan have also taken similarly restrictive steps or expressed their concerns about DeepSeek, China’s Ministry of Foreign Affairs flatly denied such allegations, although developers of the service have not yet responded (see here and here).
— Not all worried, actually —
In contrast to the growing concerns about data privacy and security expressed by regulators around the world, investors in South Korea welcomed DeepSeek's success as offering hope that low-budget startups in the country can also succeed in developing commercially viable products.
Share prices of Naver Corp, one of South Korea’s largest AI and Internet businesses, have soared 14 percent since the local market resumed trading on Jan. 31, following the Lunar New Year holiday. They fell today due to profit-taking and selling related to quarterly-earnings reports.
“An important implication from DeepSeek is that, even if South Korean companies have not led groundbreaking innovation, they can aim to seize opportunities by developing products based on those technologies,” said Yang Hee-dong, Professor at Seoul’s Ewha Womans University and the incoming President of the Korean Academic Society of Business Administration.
Yoo Sang-im, Minister of Science and ICT, was also optimistic about the DeepSeek effect on South Korea when he said earlier this week that it encouraged local companies to develop small-scale products building on the foundational technologies developed by Big Tech companies (see here).
— Reminder to Trump —
DeepSeek’s success, despite a massive set of restrictions imposed by the US for many years, may also remind the Trump administration of the importance of securing as many allies as possible, like South Korea, as he prioritizes containing China since returning to the White House in January.
This will, in turn, re-emphasize the need for him to treat South Korea, a long-time diplomatic and military ally that also possesses significant technological capabilities, more favorably so that South Korea and its companies can join US-led projects, such as Stargate, according to experts in Seoul.
Koh Tae-bong, head of research at Seoul’s iM Securities, said “the possibility is absolutely high” for South Korea’s strategic importance to become more significant to the Trump administration after DeepSeek’s rise, because South Korea has close trade ties with China while being a military ally to the US.
Yang at Ewha Womans University even suggested it is noteworthy that OpenAI CEO Sam Altman and SoftBank CEO Masayoshi Son — both of whom are leading the Stargate Project — visited Seoul to meet businessmen, including Samsung Electronics Chairman Lee Jae-yong, days after DeepSeek rocked the world.
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