Beyond the Metaverse to Virtual Convergence... Ministry of Science and ICT to Nurture AX Companies with 30 Billion Won Fund

Focused Investment in AI, Digital Twins, and XR

Supporting Global Expansion and M&A

The government is moving beyond the metaverse to foster an AI-centered "virtual convergence" industry. The strategy is to focus on nurturing companies that will lead industry-wide AX (AI transformation) based on technologies such as digital twins and extended reality (XR).

The Ministry of Science and ICT announced on March 23 that it has begun recruiting investment management firms to create and operate a "Virtual Convergence Fund" worth 30 billion won. This fund will be formed by matching 18 billion won in government contributions with at least 12 billion won in private capital, and will invest in SMEs in the virtual convergence sector, including XR, digital twins, blockchain, and AI.

Reference photo to aid understanding of the article. At the MOU signing ceremony for AX policy cooperation across industries held in October last year at the Science and Technology Advisory Committee meeting room in Jongno-gu, Seoul, Han Seong-sook, Minister of SMEs and Startups, Baek Gyeong-hoon, Deputy Prime Minister and Minister of Science and ICT, Lim Moon-young, Vice-Chairman of the National Artificial Intelligence Power Committee, and Kim Jeong-gwan, Minister of Trade, Industry and Energy, are taking a commemorative photo after signing the MOU. From left in the photo. Photo by Yoon Dongju

AI and Digital Twins at the Core: "Key Infrastructure for Industry AX"

Recently, virtual convergence technology has been rapidly expanding across industries such as manufacturing, healthcare, defense, and education through its integration with AI. In particular, digital twins and spatial computing are foundational technologies that enable AI to learn about the physical environment, and are being highlighted as key infrastructure for the era of physical AI.

The market is also growing quickly. The global virtual convergence industry is projected to expand from 150 billion dollars in 2026 to more than 500 billion dollars by 2030.

To respond to this trend, the Ministry of Science and ICT has converted its previous "Metaverse Fund" into the "Virtual Convergence Fund" and expanded the investment scope to focus on AI convergence. The new fund is structured not only to provide early-stage investment but also to support companies through their growth stages.

Selected fund managers will be required to invest at least 60% of the capital in AI convergence, overseas expansion, and mergers and acquisitions (M&A). The proportion of investments in companies entering the global market and those in the scaling up stage will also be increased. In addition, various incentives such as loss protection, excess return sharing, and call options will be provided to attract private investment.

To date, the Ministry of Science and ICT has created funds totaling 877.7 billion won through initiatives such as the Digital Content Korea Fund, supporting the discovery and growth of technology-based companies like Rainbow Robotics and Retinal.

Nam Cheolgi, Director of Software Policy at the Ministry of Science and ICT, said, "Virtual convergence technologies such as digital twins and XR are key drivers that will accelerate industry AX," adding, "We will actively support promising SMEs to grow into innovative companies with global competitiveness."

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