South Korea Introduces AI Regulation Laws; Fines For Failure To Disclose AI Use

With the United States being where the largest AI companies are located, it’s therefore maybe a bit surprising that it’s not the first country to come up with laws to regulate the tech. Instead, it’s South Korea that’s reportedly the first to do so. Reuters reports that the nation has introduced what is dubbed the AI Basic Act, “the world’s first comprehensive set of laws regulating artificial intelligence”.

Under these new laws, companies must ensure there is human oversight in “high-impact” AI. Examples include uses in in nuclear safety, production of drinking water, transport, and healthcare. It also includes financial uses like credit evaluation and loan screening.

Beyond just human oversight, companies must also notify users of products or services using high-impact or generative AI. And “when AI-generated output is difficult to distinguish from reality”, the companies must provide clear labelling accordingly. Failure to do so can result in fines of up to KRW 30 million (~RM82,114). That being said, companies are given a grace period of at least a year before fines start getting doled out.

This follows the country’s goal of becoming one of the world’s top three AI powerhouses, according to the report. The country’s Ministry of Science and ICT is cited as saying that the legal framework was made to promote AI adoption while building a foundation of safety and trust.

Beating The EU To The Punch

With South Korea introducing its AI Basic Act, its laws have taken effect before the EU. The region will have its own AI Act be applied in phases through 2027, but with harsher fines. Per the report, the EU may fine companies with between 1% and 7% of global revenue depending on the violation.

That being said, the report also cites Lim Jung-wook, co-head of South Korea’s Startup Alliance, as saying many founders were frustrated with the act. Or more specifically, that key details remain “unsettled”, owing to the vague language of the law. This will lead to companies adopting safer but less innovative approaches to AI tech to avoid risk.

Which look to be the direction of the US, at least based on Vice President JD Vance said last year. At the Artificial Intelligence Action Summit, Vance said “we believe that excessive regulation of the AI sector could kill a transformative industry just as it’s taking off”.