Cloud, edge and on-device computing could turn Korea’s semiconductor and device strengths into a physical AI advantage
South Korea could generate more than $50 billion in annual economic value from distributed artificial intelligence by 2035, as AI computing expands from centralized data centers to factories, vehicles, smartphones and robots, according to a new report from global technology policy consultancy Access Partnership.
The report, titled “From Cloud to Edge: The Value of Distributed AI in South Korea,” examines how distributed AI could help the country address structural challenges including an aging population, labor shortages and its high dependence on exports.
Distributed AI combines cloud computing with edge, on-device and on-premise processing, allowing AI workloads to be handled where they are most efficient depending on latency, privacy, bandwidth, energy use and cost.
The approach could be particularly relevant for South Korea, which has strong semiconductor, electronics and telecommunications industries as well as advanced digital infrastructure.
AI Computing Moves Beyond the Data Center
As AI moves into the physical world through robots, vehicles and industrial equipment, computing requirements are changing.
Access Partnership estimates that South Korea’s computing demand for AI inference could increase roughly 30-fold by 2030. Meeting that demand primarily through centralized cloud infrastructure would require data center capacity to expand by around five times.
Under current investment trends, however, the report estimates that available capacity could fall about 86% short of AI inference computing demand by 2030.
Distributed AI offers an alternative architecture rather than a replacement for the cloud. Large-scale workloads can remain in data centers, while applications requiring immediate responses can run on edge infrastructure or directly on devices.
This can reduce network dependence while improving response times, privacy and energy efficiency — factors that become increasingly important as AI is deployed in real-world environments.
For South Korea, the transition could create opportunities across industries in which the country already has significant manufacturing capabilities, including semiconductors, smartphones, automobiles, appliances and robotics.
Autonomous Industry Could Generate $23 Billion Annually
Manufacturing represents the largest economic opportunity identified in the report.
Access Partnership estimates that autonomous industrial operations powered by distributed AI could generate more than $23 billion in annual economic value by 2035.
Industrial robots, autonomous inspection systems and predictive maintenance could use locally processed data to detect equipment problems more quickly, reduce production downtime and improve workplace safety.
The technology could also help address labor shortages as South Korea’s working-age population declines. According to the report, 61% of the country’s manufacturing small and medium-sized enterprises faced difficulties recruiting workers in 2025.
AI and robotics could increasingly support not only repetitive manufacturing processes but also inspection, maintenance and logistics operations.
AI-Enabled Devices Could Strengthen Korean Exports
Exports represent another major opportunity.
The report estimates that distributed AI could generate more than $21 billion in annual economic value by 2035 by strengthening the competitiveness of Korean products in global markets.
On-device AI in smartphones is one example, but the opportunity extends to smart appliances, home and service robots, automobiles and extended-reality productivity devices.
Adding AI capabilities directly to products could increase their value while creating new product categories and strengthening market competitiveness.
The trend could also benefit Korea’s semiconductor industry. As more AI processing takes place on devices, demand could increase for high-performance memory, low-power processors, sensors and connectivity technologies.
Distributed AI therefore has the potential to connect Korea’s existing hardware manufacturing strengths with the next phase of global AI adoption.
Assistive Robots Offer Opportunity in Aging Society
South Korea’s rapidly aging population creates another potential market.
Access Partnership estimates that companion and assistive robotics could generate more than $5.9 billion in annual economic value by 2035.
Mobility assistance robots, fall detection systems, safety monitoring and conversational companion robots could help older people live more independently while reducing caregiving costs and the burden placed on family members.
Edge and on-device AI could be particularly valuable in this area because sensitive personal and behavioral data can be processed locally rather than continuously transmitted to external data centers.
With strengths in robotics, semiconductors and communications infrastructure, South Korea could serve as an important market for deploying and commercializing such technologies.
Physical AI Shifts Focus to Where Computing Happens
As AI adoption expands from software into physical systems, competition is increasingly moving beyond the development of larger AI models.
Where data is processed — and how computing tasks are divided between the cloud, edge infrastructure and individual devices — is becoming a key part of AI performance and deployment.
Access Partnership said South Korea will need approximately $18 billion in additional investment over the next decade, along with stronger infrastructure and global interoperability, to fully capture the economic potential of distributed AI.
For Korea, the opportunity lies in connecting its semiconductor and device manufacturing capabilities with its advanced digital infrastructure. Distributed AI could provide that bridge, extending AI from centralized data centers into factories, vehicles, consumer electronics and robots as the physical AI market develops.
