TLDR: South Korea’s recently unveiled draft enforcement decree for its Artificial Intelligence Basic Act, set to take effect in January 2026, is drawing criticism from businesses and experts for its vague definitions and potential loopholes. While aiming to clarify legislative gaps, the decree offers a short preparation window and delegates significant details to future notices, raising concerns about compliance and potential disputes. The government, however, has pledged to ease regulatory burdens, particularly concerning data use and AI-powered self-driving vehicles.
SEOUL – South Korea’s ambitious Artificial Intelligence Basic Act, slated for full implementation in January 2026, is encountering significant headwinds as its draft enforcement decree, published by the Ministry of Science and ICT (MSIT) last week (around September 16, 2025), is met with skepticism from industry and legal experts. The decree, comprising 34 articles designed to complement the basic AI law’s 46 articles, aims to provide clarity but is widely perceived as falling short, leaving crucial definitions vague and creating potential compliance challenges.
One of the primary concerns revolves around the tight timeline. With final rules expected in December 2025, businesses will have only weeks to prepare for what is being described as the world’s first AI law with punitive measures. Critics argue that this compressed schedule, coupled with the decree’s ambiguities, could lead to disputes between AI companies and the government, or leave final decisions to the discretion of the science minister.
The draft decree attempts to detail provisions related to transparency obligations, requiring generative and high-impact AI business operators to provide advance notice to end-users and label AI-generated outputs. However, it also outlines exceptions, such as when the AI use is already obvious (e.g., from product name or user interface) or when services are exclusively for internal business purposes. Furthermore, the MSIT Minister retains authority to exempt certain transparency obligations based on product type, nature, outputs, use, and technical sophistication.
For foreign AI business operators without a physical presence in Korea, the decree mandates the appointment of a domestic agent if they meet specific thresholds: total revenue exceeding KRW 1 trillion (approximately $750 million USD) in the previous fiscal year, AI service revenue over KRW 10 billion (approximately $7.5 million USD), or an average of 1 million daily domestic end-users in the preceding three months.
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Despite the criticisms, the South Korean government has signaled a commitment to fostering AI innovation. Following the first presidential meeting on deregulation, President Lee Jae Myung’s administration pledged to swiftly ease regulatory hurdles for AI developers. This includes adopting fair-use guidelines for copyrighted content and revising relevant laws as early as November 2025. Plans are also underway to simplify regulations for the development and test operation of AI-powered self-driving vehicles, aiming to establish rational transaction and reward mechanisms for copyrighted content use by the end of 2025. The National Artificial Intelligence Strategy Committee, recently reorganized with expanded powers, is set to finalize a national AI action plan by November 2025, further shaping the country’s AI landscape.
