Where Korea Should Go in the Age of AI

I never cared much about the idea of "sovereign AI." We already use products from American and other foreign tech companies and get along fine, and history has never shown me a country that did well by needlessly shutting itself off. Without quite admitting it, I'd also been vaguely looking forward to the rosy future AI was supposed to bring: freedom from work.

Then I watched a video of Yuval Noah Harari and felt a sudden chill. When the AGI era arrives, it will clearly bring humanity material abundance and freedom from labor. But the whole world won't share in those gains evenly. They're likely to end up limited to the citizens of the two superpowers, the US and China. Each government will tax the profits of its own AI giants and hand the money back to its people as a basic income. Governments will do this because they have to, to head off riots and keep their hold on power, and not out of any love for their people.

In the past I would have thought that in a global economy, a company unhappy with its government could simply move its headquarters abroad, and there was little a government could do to rein it in. But if AI moves into the category of strategic assets, that changes completely. Think of how Korea and Taiwan treat semiconductors as a strategic industry tied to national security, with tight controls on security and technology leaks. A company might be better off picking up and moving to the US, with its lighter regulation and bigger market, but governments and politicians will never stand by and allow it, for the sake of the national economy. A government that can't keep its core assets from leaving ends up paying a political price.

And if a company grows so big that it tries to escape government control, the government has the police and the military. It's an extreme case, but China makes this plain. (In a country like Russia, where state control is clumsier, the founders of companies like Yandex, Russia's largest search engine, and Telegram have left the country.) Companies also need the government to reliably supply them with well-trained talent, huge amounts of energy such as nuclear power, and social infrastructure. In the end it's a symbiotic relationship. The US in particular is so far ahead in finance, education, top-tier talent and social systems that its AI companies have every reason to work hand in hand with the government in a win-win arrangement.

The problem is the countries that are neither the US nor China. A country like the Czech Republic could become a colony almost overnight. When an AI accountant in Texas can handle the work perfectly, a Czech citizen has no reason to hire a Czech accountant.

That leaves the question of what position Korea should take. Lately I've been saddened by news of the UK, Germany and even Japan acknowledging the US and China as overwhelming superpowers and resigning themselves to being second-tier countries. Once a nation's strength and standing start to slip, they drain away fast and there's no stopping it. Korea is having a career high right now, in culture and across its economy, and I feel a real sense of alarm that this golden age could end in an instant.

As it happens, I had dinner today with a member of Bloom and picked up a clue about how we might survive this enormous shift. As someone who also holds US citizenship, I'm convinced of American dominance and support it wholeheartedly. But on the American stage, you can't survive by competing the same way ordinary Americans do. You have to make the most of what sets you apart, and the core of that is Korea's geopolitical position.

1. Creativity comes from desperation, more than from flashes of inspiration

When this person led North American management at an American company, the employees who showed the most creative problem-solving, they told me, were Chinese and Indian. People tend to think of creativity as an idea that comes to you out of nowhere in the middle of the night, but at its core, creativity is the ability to solve problems. Those employees solved problems best because they were desperate. They had to survive somehow so they wouldn't have to go back home. Real creativity grows out of scarcity and limits.

2. Use Korea's position: made in China, sold in America

Korea was once able to export construction and weapons to the Middle East because it had Western-level technology and infrastructure while being relatively free of human rights and political baggage. It was a "third option." Unfortunately, being wedged between great powers has always been both Korea's reality and its opportunity.

We have to look at this coldly. China's manufacturing capability has already passed Korea's (this happened while we were looking only at the US, Europe and Japan), and we can't beat the US in software. The only strategy left to us is to turn the US-China rivalry to our advantage.

In the AI era, the real moat may turn out to be Chinese manufacturing. Traditional manufacturing without AI was a "3D" industry (dirty, dangerous and difficult) with no real margins, so the US and Europe walked away from it, and Korea was also in the middle of shifting toward services and finance. But as AI lowers the barriers in software and services, the barriers to physical manufacturing are, paradoxically, getting higher. Services can be copied across borders quickly, but a manufacturing base (the industrial ecosystem, skilled workers, the wage structure) can't be brought back once it collapses.

China may hand the lead to India or Vietnam someday, but right now China is clearly at the top of high-end manufacturing. Look at premium products like TVs and electric cars: China wins decisively on both price and performance. Just as Korea once took the ground Europe and Japan gave up, China is now taking Korea's share of manufacturing. If anyone should worry about technology leaks, it's China, not us.

In the European market, Korea and China may not look very different, since both are "innovative Asian manufacturers." The US market is another story. Because of US-China tensions, "made in Korea" still carries a strong premium there.

That's where the opportunity lies: white labeling. When I watch demos from startups that want to manufacture in the US, they often feel unrealistic. Someone like Elon Musk might pull it off, but Shenzhen already has that kind of talent and infrastructure everywhere you look, and even Tesla builds cars in its Chinese factory.

For political reasons, though, the door is closing on American companies outsourcing directly to Chinese factories. It's a dilemma neither American nor Chinese companies can solve on their own. That is exactly where Korea fits: a go-between that partners with China's overwhelming manufacturing infrastructure and supplies the American market in a form that suits it.

We can enjoy America's freedom and its systems and still make full use of China as a manufacturing partner. In the AI era, when it's hard to survive on your own strengths alone, playing the geopolitical dynamics smartly is how Korean businesses will survive.

Originally published in Korean on Brunch, October 29, 2026.