[The Editors' Verdict] Galapagos Japan and the 'Line Yahoo Incident'

Japan has been called the "Galapagos of the IT industry." It is more accustomed to fax machines, seals, and cash than to email, electronic signatures, and card payments. The digitalization of government administrative services has also been slow. Japan paid a heavy price during the COVID-19 pandemic. Receiving disaster relief funds by mail was faster than applying online. Information systems for smooth vaccination and infection information sharing systems frequently malfunctioned. The Japanese cabinet expressed deep regret, calling it a "digital defeat."

The Asia-first base chosen by OpenAI, the developer of the generative AI ChatGPT, was precisely Japan. In the AI era triggered by ChatGPT, Japan seems to see this as the last chance to escape from the Galapagos syndrome. It has put its life on building an AI ecosystem. It has secured everything from semiconductor wafers and various materials, parts, and equipment to foundry (semiconductor contract manufacturing) production bases. It has announced plans for domestically produced AI chips, domestically produced generative AI, and supercomputers.

Another essential pillar in the AI ecosystem is data centers. Microsoft (MS) announced last month, coinciding with Japanese Prime Minister Fumio Kishida’s visit to the U.S., that it will invest $2.9 billion (4 trillion won) over the next two years to expand its cloud computing and AI business. In January, Amazon announced it would invest 2.26 trillion yen (about 20.22 trillion won) by 2027. Enterprise software company Oracle also announced that it will invest more than $8 billion (about 11 trillion won) in Japan over the next ten years to expand its data centers.

AI technologies and services operate on an interdependent digital system based entirely on data. Data is often called "the new oil." While the Industrial Revolution was powered by coal and oil, the AI era is powered by data, which is both the driving force and the source of wealth.

Last year, Elon Musk, CEO of Tesla, restricted the external collection of data from the social networking service (SNS) X (formerly Twitter), which he owns. He has claimed that other companies have been collecting X’s posts without permission and using them for AI training. The spectacular IPO of the U.S. SNS company Reddit in March is related to this. Reddit is a platform where users freely chat and share information across numerous topic communities. It is a treasure trove of data needed by AI companies. Reddit’s Chief Operating Officer (COO), Jen Wong, said in a local interview, "The information Reddit holds is very important for training large language models (LLMs)."

Major countries want to keep data and personal information used for AI development and services within their borders without exporting it overseas. This is an emphasis on "data sovereignty." The European Union (EU) restricts cross-border transfers of personal data through the strong guidelines of the General Data Protection Regulation (GDPR). The U.S. crackdown on TikTok is also justified on the grounds of personal data protection.

The "Line incident," triggered by the Japanese government’s demands such as adjusting Naver’s shareholding, occurred within this context. It is absurd that the Japanese bureaucrat leading this incident is said to be a descendant of Ito Hirobumi, and that there are plans to visit Dokdo to protest Japan. What is needed now is not emotional agitation like a "second No Japan" campaign but to face the AI war that has surfaced. Korea must assess how far behind it is in building an AI ecosystem and prepare accordingly. Bamboo spears (竹槍) cannot win the AI era.

This content was produced with the assistance of AI translation services.