[Exclusive] "I can't trust China AI" I'll say it"…It also uses Pangyo, an "IT heart" for tens of times cheaper

Company A, an artificial intelligence (AI) startup in Pangyo Valley, Seongnam, Gyeonggi Province, uses Alibaba's video-making AI model Wan and its Happy Horse series on a platform where customers pay a monthly fee to create AI content. Users can type one sentence describing a scene they want, and the platform makes a video to promote a product. For $20 a month, users can use the videos for business purposes. A company official said, "Chinese models offer the best balance between performance and cost for making videos."

◆ Developers: "Using Chinese AI is an everyday thing"

Chinese AI models are spreading quickly among developers in South Korea, following a similar trend in Silicon Valley in the United States. South Korean startups are using Chinese AI products in paid services. At the same time, the share of newly released AI model outputs from South Korean developers that are based on Chinese models has risen from 1% to 49% in three years. Security concerns keep many ordinary consumers from using these products, but their low prices and strong performance are helping them become common among developers.

According to a report released on the 20th by a research team led by Choi Sung-jin, a business professor at Hanyang University, through Rockbridge Network Korea, 49.3% of the new language model outputs shared by South Korean accounts on the AI model-sharing platform Hugging Face between January and August this year were based on Chinese models. This was higher than the US share of 35.9%. The share of Chinese models rose sharply from 1.2% in 2023 to 22% last year and 49.3% this year.

◆ Alibaba's Q1 is the first choice

Chinese models are already a normal part of AI development in South Korea. An official at a startup said, "We mainly use Chinese models such as Q1 and DeepSeek for services that need to handle large numbers of requests from users." The biggest reason is cost. For services that handle many requests, such as character-chat apps where users talk to AI characters, the fees for using AI models directly affect how much money the business makes.

According to the report, when models with similar performance are compared, Chinese models cost one-quarter as much as US models to produce output. Running the same performance tests also cost about four times less with Chinese models.

Q1 is leading the spread of Chinese AI models among developers in South Korea. Of the 1,845 new outputs shared by South Korean accounts this year, 864, or 46.8%, were based on Q1. This was more than Google's Gemma at 14.7% and Meta's Llama at 13.8%. Among South Korean models, Exaone from LG AI Research had the highest share of use, at 9.3%.

◆ Growing concerns about depending too much on technology from one country

Chinese AI has not gained the same level of popularity among ordinary consumers. DeepSeek, which ranked first in South Korea's app store downloads last year, lost more than 60% of its daily users over two weeks following a controversy about personal data protection. As of July this year, no Chinese service was among the 10 most-used AI chatbot apps in South Korea.

In a survey of 102 small and medium-sized companies in South Korea, not one said it used Chinese AI services for work. The main reasons were concerns about data leaks (80.2%) and a lack of clarity about how personal information is handled (67.7%). Professor Choi said, "What worries me is that dependence on technology from one country is becoming too great." He stressed that for South Korean AI models to be chosen by developers, they must offer more than good performance. They also need licenses that allow commercial use, models of different sizes, and the tools and examples needed to train models further.

Silicon Valley correspondent Won Ho-seop

Reporters Ko Min-seo, Do Geun-chae, and Kang Young-woon, Seoul