U.S. official says South Korea data rules hinder AI growth

A senior U.S. official on Tuesday said South Korea's requirements for physical isolation of government servers and data localization policies create barriers to artificial intelligence growth in the country. Russ Headlee, senior bureau official for cyberspace and digital policy at the State Department, made the comments at a forum hosted by the National Bureau of Asian Research.

He called for regulatory changes that would allow logical server separation and cross-border data flows for low- to moderate-tier data.

Policy measures cited Headlee listed several measures South Korea has considered or implemented. These include restrictive data localization rules, limits on foreign cloud providers, network usage fees on content platforms, and procurement policies that restrict government choices of technology providers.

He said such policies raise costs, reduce competition, and in many cases increase security risks rather than strengthen national or economic security.

U.S. position stated Headlee warned against appeals to digital sovereignty that he said are designed to discriminate against American companies. He argued that real AI sovereignty involves choosing partners who empower rather than create new dependencies.

The forum addressed Korea's cyber regulatory landscape in the AI era, a topic under discussion between Seoul and Washington to expand cooperation in the technology sector.