Upstage’s Private AI Models Attract $19 Million Investment from SK Networks

South Korea’s SK Networks Co. has made a strategic investment of 250 billion won ($19.02 million) in Upstage, a domestic artificial intelligence (AI) solutions startup specializing in private small-scale large language models (ssLLMs). Upstage’s AI technology stands out in the ssLLM market by emphasizing information security and domain-specific expertise, unlike traditional large language models.

With this, SK Networks plans to expand its presence in the emerging technology landscape. As the lead investor in Upstage’s Series B funding, the general trading affiliate of SK Group aims to support Upstage in the private large language model sector. 

Upstage’s proprietary private large language model (LLM) technology, which is trained on individual companies’ data, has established a solid client base spanning various sectors, including government agencies, finance, information and communication technology (ICT), and commerce. 

Leveraging SK Networks’ global AI ecosystem, built through extensive investments and collaborations, Upstage plans to venture into the international market. SK Networks anticipates synergies with en-core, a recently acquired data management and solutions company, as it backs Upstage’s market expansion. 

The company envisions integrating en-core’s data management services with Upstage’s private Large Language Model (LLM) technology. The acquisition of en-core in October supports SK Networks’ strategy to enhance its AI ecosystem and drive business innovation. 

An SK Networks official expressed the company’s views on supporting Upstage’s international growth, leveraging its widespread global network cultivated through investments in tech companies worldwide. 

Upstage, recognized for its advanced technology in the small-scale LLM market, introduced AskUp, an AI chatbot service based on OpenAI’s GPT-4 language model. Upstage, during CES 2024, explored potential collaborations with American companies, indicating its interest in utilizing SK Networks’ global network for international expansion.

Upstage’s internally developed small language model, Solar, garnered acclaim by securing the top position on the Open LLM Leaderboard in December with a score of 74.2 points, as evaluated by Hugging Face, the world’s largest machine learning platform. Upstage became the first domestic AI startup to accumulate ten gold medals in the prestigious Kaggle competition, considered the Olympics for AI. 

SK Networks President and Chief Operating Officer Choi Sung-hwan and Upstage CEO Kim Seong-hoon finalized the deal in Las Vegas during CES 2024, the world’s largest tech show.

With the global AI, market projected to surge from $23 billion in 2022 to $207 billion by 2030, according to Statista, the growth trajectory of the LLM sector is particularly noteworthy, estimated to reach $52 billion with an average annual growth rate of 24 percent compared to 2022.

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