South Korea Backs 175 Small Businesses in AI Push

Small businesses in South Korea are getting a major tech upgrade thanks to a government program investing millions in AI transformation.

The Ministry of SMEs and Startups selected 175 companies to receive funding under its 2026 smart services program, which helps small and midsize businesses adopt artificial intelligence and go digital. Each company will receive between ₩50 million and ₩100 million (roughly $37,500 to $75,000) to build AI-powered solutions for everything from supply chain management to marketing.

The response was overwhelming. A total of 545 companies applied for the program over two months, creating a competitive 3-to-1 ratio. The government evaluated each applicant on their need for support, implementation plans, and potential impact before making final selections.

Distribution companies grabbed the biggest share, with 50 businesses representing 29% of recipients. Information and communications firms followed with 39 companies, while science and technology services claimed 34 spots. The mix includes both fresh startups (47%) and more established growth-stage companies with at least seven years in business (53%).

Recipients now have about six months to build their smart service solutions after signing agreements with the Korea Technology and Information Promotion Agency for SMEs. The government plans to support companies throughout the entire development process to ensure results.

The Ripple Effect

This investment arrives at a crucial moment when small businesses worldwide struggle to keep pace with rapid technological change. By funding AI adoption specifically for service-sector companies, South Korea is helping level the playing field between small enterprises and tech giants.

The program also addresses a real gap in the market. Many small businesses recognize AI's potential but lack the capital to experiment with new technologies. This funding removes that barrier and gives companies room to innovate without risking their core operations.

Director General Hwang Young-ho emphasized the program's dual purpose: creating new business models while boosting productivity and competitiveness. The support extends beyond just funding, with the government providing management assistance to help ensure these AI experiments actually work.

For 175 Korean small businesses, the next six months could reshape their entire future.