Seoul: Moving ahead of the European Union in artificial intelligence regulation, South Korea has unveiled the world’s first Artificial Intelligence (AI) Basic Act, positioning itself at the forefront of global efforts to regulate emerging technologies. While the government has pitched the move as a step toward responsible and transparent AI use, the announcement has triggered unease among local startups and technology firms.
Under the proposed law, companies will be required to clearly inform consumers whenever AI is used in a product or service. In addition, content generated using AI—including text, images, audio and video—will have to carry visible labels or watermarks, enabling users to distinguish between human-created and AI-generated material.
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South Korean authorities argue that the legislation is designed to address risks associated with AI, including misinformation, misuse and erosion of public trust. Officials say the AI Basic Act is part of a broader national strategy to establish South Korea as one of the top three global AI powerhouses, alongside the United States and China.
However, the announcement has sparked immediate concern within the country’s startup ecosystem. Entrepreneurs and industry representatives warn that strict compliance requirements could slow innovation, particularly for early-stage companies with limited legal and financial resources.
Startup founders argue that mandatory disclosures and labelling norms for every AI-enabled feature may complicate product development cycles and increase operational costs. They fear this could weaken the global competitiveness of South Korean startups, especially at a time when companies in other regions are operating under more flexible regulatory frameworks.
The development comes as the European Union’s much-discussed AI Act is still in the implementation pipeline, with full enforcement expected around 2027. By moving faster than the EU, South Korea has positioned itself as a global first mover in AI regulation, potentially influencing how other countries shape their own policies.
Experts note that transparency lies at the heart of the AI Basic Act. Giving users clear information about whether they are interacting with AI systems is expected to strengthen digital trust. Similarly, clear identification of AI-generated content could help curb the spread of deepfakes and deceptive material, which have emerged as major challenges in the AI era.
At the same time, critics point out that several aspects of the proposed law remain vague. Questions persist over how broadly “AI-generated content” will be defined and at what level of automation labelling will become mandatory. Industry observers say clarity on these issues will be crucial to ensure consistent enforcement and avoid regulatory uncertainty.
Government officials have indicated that consultations with industry stakeholders, startups and technical experts will continue before the law is finalised. They insist that the objective is not to stifle innovation, but to create a trustworthy AI ecosystem where technological advancement goes hand in hand with consumer protection.
South Korea already enjoys a strong global reputation in semiconductors, electronics and digital technology. Through the AI Basic Act, the country aims to signal that it intends not only to lead in AI development, but also to shape global standards for its governance.
In the coming months, attention will focus on whether policymakers incorporate industry feedback and introduce flexibility in compliance norms. The balance between regulation and innovation will be closely watched, both within South Korea and internationally.
For now, the AI Basic Act has placed South Korea at the centre of the global AI policy debate—highlighting the growing challenge faced by governments worldwide: how to regulate powerful new technologies without undermining the innovation that drives them.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
