Korea’s public sector has historically faced challenges adopting advanced AI due to strict data-security regulations. That barrier has now been broken. Upstage, a rising Korean AI startup, has become the nation’s first approved provider of generative AI solutions for government use, marking a major step in modernizing public administration.
First-Ever Generative AI Contract for Government Use
On December 4, Upstage registered its “Public AI Workspace” on the Public Procurement Service (PPS) Digital Service Mall, officially becoming Korea’s first generative AI solution provider for public administration. Under this agreement, Upstage will supply the Generative AI Office Support Service to government ministries, municipalities, and agencies, enabling civil servants to use generative AI within previously segregated government networks.
The platform integrates Upstage’s proprietary large-language model (LLM) “Solar” with OCR-based document processing, allowing secure handling of HWP, Word, and PDF files for search, summarization, and information extraction.
Breaking the Barrier of Segregated Networks
Until now, network separation mandates had prevented cloud-based AI deployment in Korea’s public sector. The PPS recently introduced a “Generative AI Office Support Service” category that allows secure AI integration through vetted domestic providers. Upstage’s registration represents a significant policy milestone, supporting the government’s goal of improving efficiency and reducing manual documentation.
Commitment to Responsible AI
Upstage CEO Kim Sung-hoon emphasized, “This collaboration marks the start of full-scale deployment of world-class Korean generative AI in government operations. Upstage will continue to accelerate innovation across the public sector with safe and reliable technology.” The company showcased its Public AI Workspace at the 2025 Korea Government Innovation Expo in Cheongju Osong, providing hands-on demonstrations of AI features optimized for administrative workflows.
Public Procurement and AI Commercialization
Upstage’s entry into the PPS procurement system illustrates how public-sector digital transformation can serve as a testbed for enterprise-grade AI adoption. With growing domestic focus on AI sovereignty, this move signals a preference for homegrown solutions over imported platforms. It also positions Korea as a potential model for secure government AI procurement across Asia-Pacific.
Strategic Significance
The approval comes amid heightened digital-security concerns following incidents such as the Coupang data breach and Upbit exchange hack. Upstage’s proprietary model, Solar Pro 2, which recently outperformed GPT-4.1 in global benchmarks, demonstrates that domestic AI can compete at a global level.
Future of Public-Sector AI in Korea
Beyond a business milestone, Upstage’s approval marks a cultural and institutional shift, paving the way for AI integration across defense, education, and municipal administration. As government agencies begin experimenting with verified domestic AI platforms, Korea’s public sector is poised to become a leading environment for innovation and AI-driven service modernization.