As per MRFR analysis, the South Korea AI in IoT Market Size was estimated at 290.48 (USD Million) in 2023.The South Korea AI in IoT Market is expected to grow from 372.4(USD Million) in 2024 to 1,186.4 (USD Million) by 2035. The South Korea AI in IoT Market CAGR (growth rate) is expected to be around 11.109% during the forecast period (2025 - 2035)
Key South Korea AI in IoT Market Trends Highlighted
The market for AI in IoT is expanding significantly in South Korea thanks to both increased government initiatives and technological breakthroughs. One of the main factors driving the market is the Korean government's dedication to creating smart cities and incorporating AI into a number of industries, including manufacturing, healthcare, and transportation.
National initiatives that prioritize improving IoT connection and constructing digital infrastructures help this effort. The need for AI-enabled products and services that improve user experiences and expedite processes in smart cities and households is therefore growing.
Furthermore, utilizing AI for real-time data analytics to enhance IoT device performance and decision-making is one of the potential to be investigated in South Korea's landscape. Precision farming, which reflects a larger trend of sustainability and efficiency in many sectors, is one industry that is leveraging these technology to maximize resource management.
Innovation is also encouraged by the growing cooperation between South Korean startups and well-established businesses, which leads to a wide variety of AI and IoT applications. Recent trends show that AI-powered IoT solutions are moving toward edge computing, which enables quicker data processing near the source—a crucial feature for industries like driverless cars and smart factories.
Another trend is the increased focus on cybersecurity to safeguard data produced by networked devices, which necessitates the use of strong security measures. The nexus of AI and IoT is set to revolutionize South Korea's industrial environment and open up new opportunities for innovation and economic growth as the country maintains its position as a technological leader.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
South Korea AI in IoT Market Drivers
Government Initiatives and Investments in AI Technology
The South Korean government has been actively promoting the integration of Artificial Intelligence into various sectors, including the Internet of Things. In 2020, the South Korean government announced a plan to invest approximately 1.5 trillion South Korean Won (around 1.3 billion USD) in AI technologies over a span of five years, as part of their initiative to establish a leading position in the global AI market.
This funding is directed towards early-stage development and commercialization of AI technologies, fostering innovation, and attracting top talent to enhance the South Korea AI in IoT Market. Additionally, the establishment of the 'Korean AI Policy Council' aims to create a favorable ecosystem for AI development.Established organizations like Samsung Electronics, with extensive resources and capabilities, are taking advantage of these initiatives to enhance their AI and IoT portfolios, which is expected to significantly drive the market growth in South Korea.
Rising Adoption of Smart Devices in Households and Enterprises
The increasing adoption of smart devices in South Korean households and enterprises is a crucial driver for the South Korea AI in IoT Market. Reports indicate that as of 2021, over 80% of South Korean households are using at least one smart device, which has increased significantly in recent years.
Companies like LG Electronics are pivotal in this landscape by continuously innovating and launching smart home products that incorporate AI functionality. Furthermore, research from the Ministry of Science and ICT indicates that smart home appliance sales grew by 35% from 2019 to 2021, creating a conducive environment for AI integration and expanding the market for AI-enabled IoT applications.
Focus on Data-Driven Decision Making
The increasing emphasis on data analytics and data-driven decision-making practices in South Korea is significantly fueling the growth of the South Korea AI in IoT Market. A recent survey conducted by the Korean Statistical Information Service revealed that approximately 60% of Korean businesses are currently utilizing data analytics to enhance operational efficiency and customer satisfaction.
Major corporations, such as SK Telecom, are leveraging AI and IoT technologies to analyze massive datasets to streamline their services and derive actionable insights. The trend toward data-centric business models is expected to accelerate investment in AI-driven IoT solutions, thus enhancing market potential in South Korea.
AI in IoT Market Component Insights
The Component segment of the South Korea AI in IoT Market plays a critical role in the overall growth and deployment of artificial intelligence technologies across various sectors, with a direct impact on enhancing operational efficiency and productivity.This segment encompasses various essential elements such as Platforms, Software Solutions, and Services, each contributing uniquely to the market dynamics. Platforms serve as the foundational layer enabling organizations to integrate AI capabilities with Internet of Things devices, promoting real-time data processing and smart decision-making.
The Software Solutions aspect focuses on providing various tools and applications that leverage AI for predictive analytics, automation, and improved user experiences, which are increasingly becoming vital in industries such as manufacturing, healthcare, and smart cities.Meanwhile, Services, which include consulting, integration, and support, are imperative for organizations looking to adopt AI and IoT technologies effectively. As the South Korean government continues to support digital transformation initiatives, these components will likely gain traction, bolstered by an increasing investment in Research and Development.
South Korea's strong technological infrastructure and its emphasis on innovation further underscore the significance of the Component segment within the AI in IoT Market. The integration of AI with IoT applications has been recognized as a key enabler for enhancing supply chain management, optimizing resource allocation, and achieving overall operational excellence across various industries.Furthermore, the ongoing digital transformation in South Korea is set to open numerous opportunities for growth, as businesses increasingly rely on intelligent systems for better decision-making and customer engagement.
Overall, the Component segment is expected to witness substantial developments, driven by technological advancements, a growing emphasis on automation, and the rising need for sophisticated solutions that cater to the rapidly evolving demands of consumers and enterprises in the region.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
AI in IoT Market Technologies Insights
The South Korea AI in IoT Market, particularly in the Technologies segment, is experiencing steady growth due to the increasing integration of advanced technologies in various industries.The importance of Machine Learning and Deep Learning lies in their ability to enhance predictive analytics and automate decision-making processes, fostering efficiency in sectors such as manufacturing, healthcare, and smart cities.Natural Language Processing (NLP), on the other hand, plays a crucial role in human-computer interaction by enabling systems to understand and respond to user queries in a natural manner, which is significant for customer service applications and personal assistants.
As innovation accelerates, the market is witnessing new applications for AI, leading to improved operational efficiencies. The South Korean government actively supports AI initiatives through various programs and funding, bolstering the growth potential of AI technologies in the IoT domain.This synergy between AI and IoT is paving the way for smarter, data-driven environments that enhance both productivity and user experience. With these trends, the Technologies segment is redefining how industries operate and engage with their customers, ensuring South Korea remains a key player in the global AI landscape.
AI in IoT Market Vertical Insights
The South Korea AI in IoT Market segment focused on Vertical showcases a robust framework where diverse industries leverage artificial intelligence integrated with the Internet of Things to enhance operational efficiency and decision-making processes.Manufacturing stands out as a key area, utilizing AI-driven IoT applications to optimize production schedules and minimize downtime, thereby boosting productivity. In the Energy and Utilities sector, AI in IoT aids in predictive maintenance and resource management, aligning with South Korea's commitment to renewable energy and efficiency.
Transportation and Mobility are transformed through intelligent traffic management systems, contributing not only to improved logistics but also to reducing congestion in metropolitan areas. The BFSI sector utilizes AI to enhance fraud detection and improve customer service, aligning with government initiatives to advance fintech solutions.In the realm of Government and Defense, integrating AI and IoT is proving vital for national security and public safety efforts. The Retail industry benefits significantly from AI-based analytics, which enhance customer engagement and inventory management, responding to changing consumer demands.
Healthcare and Life Sciences incorporate AI-fueled IoT for patient monitoring and management, revolutionizing how care is delivered. Lastly, Telecom is essential in providing the connectivity and infrastructure needed to support such advanced applications across all verticals.The South Korea AI in IoT Market is poised for significant growth due to these advancements, shaped by both technological innovation and the strategic emphasis placed on various sectors by government policies.
South Korea AI in IoT Market Key Players and Competitive Insights
The South Korea AI in IoT market is gaining significant traction due to the country's advanced technological landscape and the growing demand for smart solutions across various sectors.The competitive dynamics within this market are shaped by a confluence of local players pushing boundaries in artificial intelligence applications, as well as the integration of IoT devices in smart cities, healthcare, manufacturing, and home automation.
As companies strive to enhance their offerings, not only are they innovating but they are also forming strategic partnerships and collaborations to foster a thriving ecosystem. The landscape is highly competitive, characterized by rapid advancements in technology and the continuously evolving needs of consumers and businesses alike.Players are leveraging their technological expertise to develop AI solutions that optimize IoT-enabled devices, enhance connectivity, and provide better data analysis, thereby driving growth opportunities in this landscape.
Naver Corporation has established itself as a formidable player in the South Korea AI in IoT market, focusing on the integration of artificial intelligence with internet-of-things applications. The company utilizes its expertise in search technology and big data analytics to enhance user experiences and drive innovation in smart home technologies, autonomous vehicles, and digital assistants.
Naver's strengths lie in its strong local brand recognition, a robust digital ecosystem, and continuous research and development efforts to push AI integration in various IoT applications. The company collaborates with various stakeholders, including startups and academia, to foster innovation within the IoT sphere in South Korea.
By leveraging its technological capabilities, Naver aims to incorporate advanced AI features in IoT devices, enhancing their functionality and providing customers with more intelligent solutions.SK Telecom, being a significant player in the telecommunications sector, also has a noteworthy presence in the South Korea AI in IoT market. The company offers key products and services that seamlessly integrate AI capabilities into IoT solutions, such as smart meters, smart cities infrastructure, and connected vehicles.
SK Telecom has built a strong ecosystem based on its 5G network and edge computing technologies, enhancing the performance of IoT applications. The company has engaged in strategic mergers and acquisitions to bolster its capabilities, which allows it to maintain a competitive edge in delivering innovative IoT solutions powered by AI.
Its focus on smart city projects and various IoT platforms showcases SK Telecom's commitment to harnessing AI technologies to enhance operational efficiencies and enrich user experiences within the growing South Korean market.The company's strong emphasis on partnership development with tech innovators further strengthens its position as a leading force in the integration of AI with IoT solutions in the region.
Key Companies in the South Korea AI in IoT Market Include
South Korea AI in IoTMarket Developments
Naver's generative AI services were introduced in August 2023 with the ClovaX platform, which incorporates cutting-edge AI capabilities into a range of applications. Furthermore, in May 2025, Naver announced the creation of Naver Ventures, a company dedicated to finding AI talent and funding innovative AI firms in the United States.
SK Telecom announced notable progress in artificial intelligence in 2024 and restructured its business into seven major AI-focused units.In order to expedite the expansion of AI infrastructure in both local and foreign markets, SK Telecom established 'SKT GPUaaS' and opened the Gasan AI data center in December 2024 in collaboration with Lambda.For the first time by a Korean construction business, Daewoo E&C unveiled "AI Media Pagora," a cutting-edge rest area that blends art and artificial intelligence technology, in June 2025 as part of its flagship residential brand, Prugio Complex.
The software division of Hyundai Motor Group, 42dot, revealed plans in July 2025 to fund $500 billion ($360 million) through a rights sale in order to improve its software development and artificial intelligence capabilities. Hyundai Motor also unveiled 'Shucle,' a demand-responsive transportation platform that uses artificial intelligence (AI) to optimize vehicle operations in response to passenger demand in real time.With the support of its logistics and retail data, Coupang launched its new AI-focused intelligent cloud computing service in July 2025 with the goal of moving beyond logistics and retail into content and cloud services.
South Korea AI in IoT Market Segmentation Insights
AI in IoT Market Component Outlook
AI in IoT Market Technologies Outlook
AI in IoT Market Vertical Outlook
| Report Attribute/Metric Source: | Details |
| MARKET SIZE 2023 | 290.48(USD Million) |
| MARKET SIZE 2024 | 372.4(USD Million) |
| MARKET SIZE 2035 | 1186.4(USD Million) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 11.109% (2025 - 2035) |
| REPORT COVERAGE | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR | 2024 |
| MARKET FORECAST PERIOD | 2025 - 2035 |
| HISTORICAL DATA | 2019 - 2024 |
| MARKET FORECAST UNITS | USD Million |
| KEY COMPANIES PROFILED | Naver Corporation, SK Telecom, Daewoo Engineering & Construction, Hyundai Motor Company, Coupang, Gabia, Korea Electric Power Corporation, VUNO, KT Corporation, Samsung Electronics, SK hynix, POSCO, LG Electronics, Mando Corporation, Hanwha Solutions |
| SEGMENTS COVERED | Component, Technologies, Vertical |
| KEY MARKET OPPORTUNITIES | Smart city development initiatives, Industrial automation solutions, Healthcare IoT innovations, Agricultural technology advancements, Enhanced cybersecurity measures. |
| KEY MARKET DYNAMICS | Technological advancements, Government support, Growing data analytics, Rising consumer demand, Increasing connectivity integration |
| COUNTRIES COVERED | South Korea |
Frequently Asked Questions (FAQ):
The South Korea AI in IoT Market is expected to be valued at 372.4 USD Million in 2024.
In 2035, the market is anticipated to reach a value of 1186.4 USD Million.
The market is projected to grow at a CAGR of 11.109% from 2025 to 2035.
The market is divided into Platforms, Software Solutions, and Services.
Platforms are expected to be valued at 482.0 USD Million by 2035.
Software Solutions are projected to reach a value of 380.0 USD Million in 2035.
By 2035, Services are expected to grow to 324.4 USD Million.
Major players include Naver Corporation, SK Telecom, and Hyundai Motor Company, among others.
As of 2024, Platforms hold the largest segment with a value of 150.0 USD Million.
Key trends include increasing automation, enhanced connectivity, and smart technology adoption driving growth.
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Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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