Sequoia, a16z, and other six major Silicon Valley VC firms have partnered with South Korea’s National Pension Service, increasing support for AI and semiconductors, along with massive domestic capital in South Korea. Global funds are pouring into South Korea’s tech innovation sector.

This wave in South Korea is drawing on the experience and resources of leading overseas top-tier VCs, using long-term capital to lay out investments in hard technology. This can enhance South Korea’s competitiveness in East Asia’s AI and semiconductor fields.

However, when large amounts of “hot money” crowd into popular tracks, it can drive up project valuations and create a bubble. If industry development afterward fails to meet expectations, valuations will likely fall, affecting investment returns.

In the short term, South Korea’s venture capital industry receives a boost, but in the long run it depends on whether the capital can truly land in real-world industries, avoiding a situation where valuations are only being traded.