Issue Brief

Institute for Future Strategy Issue Brief Vol. 47
“AI Transformation of Korea’s Manufacturing Sector and Data Sovereignty”

This issue brief examines the structural risks confronting the AI transformation of Korea’s manufacturing sector amid intensifying U.S.–China technological rivalry and the rapid global expansion of AI led by Big Tech platforms, while highlighting the growing importance of data sovereignty.

Despite strong performance in key industries such as semiconductors, shipbuilding, and defense in 2025, Korea’s manufacturing sector continues to face deepening dependence on foreign platforms due to deficiencies in operational software and data management capabilities. In particular, during the process of AI adoption in manufacturing, there is a heightened risk that tacit knowledge from production sites may be converted into data and transmitted to, accumulated in, and controlled by overseas servers.

Against this backdrop, the issue brief critically reviews existing discussions on “sovereign AI,” noting their disproportionate focus on model sovereignty. It argues instead that the core of manufacturing AI competitiveness lies in securing and exercising control over high-quality, domain-specific data—that is, in achieving data sovereignty. The brief therefore underscores the need for proactive policy responses aimed at safeguarding data sovereignty.

Building on this analysis, the issue brief proposes a national strategy to secure data sovereignty through comprehensive support for the development of on-premise sovereign AI infrastructure, the promotion of domestic manufacturing AI consortia, strengthened legal and institutional protections for AI training data, and the establishment of standardized AI data sovereignty contracts that clearly define data ownership and rights over derivative data. Together, these measures are presented as essential steps toward fostering a robust manufacturing AI ecosystem and strengthening legal governance in the AI era.