Hwalsuk Lee was careful about the numbers he would not give. The co-founder and chief technology officer of Upstage, the South Korean AI startup backed by Advanced Micro Devices, said in an interview that the company is weighing several options in the capital markets, including an initial public offering, and has not fixed a timeline or a size. One option now on the table: a pre-IPO financing round.
The Seoul-based company has reason to keep its options open. It closed a 560 billion won round, about $420 million, earlier this year in a Series C, bringing its total raised to 730 billion won. The AI sector’s appetite for computing hardware keeps growing, and Lee said the company’s capital needs continue to rise as a result. The hardware bill, in other words, is what pushes the financing question forward.
Upstage is best known at home as one of the last three contenders in South Korea’s national foundation-model competition, a government-run contest that local media has nicknamed the AI Squid Game. The six-year-old startup is competing against LG AI Research and SK Telecom, both backed by the country’s largest conglomerates, for two winning slots. Results are due early next year.
That contest frames Upstage’s position. It is the independent upstart in a field dominated by chaebol subsidiaries, and its survival so far is part of its pitch to investors. Winning one of the two slots would bring government backing and a stamp of legitimacy; losing would leave the company to compete on its own against competitors with far deeper pockets.
AMD’s involvement gives Upstage a different kind of credibility. The American chipmaker has a strategic partnership with the startup and has made a strategic investment, a relationship that matters in a sector where access to accelerators is as important as access to capital. Analysts said an AMD relationship can help an AI startup secure hardware and signal technical seriousness to other investors.
The pre-IPO round, if it happens, would serve a specific purpose. Companies raise such rounds to bridge the gap between late-stage venture funding and a public listing, often to fund growth that makes the eventual IPO larger. Upstage’s chief technology officer framed it as one of several possibilities, not a settled decision, and said the company is still evaluating the timing of any public offering.
The Korean AI market is crowded and increasingly competitive. Big tech firms have rolled out their own models, and the conglomerate labs have the advantage of distribution through their parent companies’ products. Upstage has built a reputation for its language models and enterprise work, but it operates at a scale far smaller than the domestic giants it now faces in the national contest.
Lee’s comments arrive as investors globally have turned cautious about AI startups that spend heavily on compute without a clear path to profit. The days when a model company could raise at any price are over, and late-stage rounds now carry harder questions about revenue and margins. Upstage’s decision to explore a pre-IPO round rather than rush to market suggests a company calibrating its story before asking the public to buy it.
The national competition has been a rallying point for the Korean government’s AI ambitions, which include domestic alternatives to American and Chinese models. Upstage’s place among the final three is a credential, but it is also a reminder of the stakes: two winners, one loser, and a result that will reshape the sector’s funding map next year.
For now, Lee was firm only on what remains undecided. No IPO date, no round size, no commitment to any single path. The company is raising its options at the same time it is likely to need more money, and the hardware costs that drive that need are not falling.
Upstage’s backers include a mix of Korean and international investors alongside AMD. The chipmaker’s stake ties the startup’s fortunes, at least in part, to the broader battle between AMD and Nvidia for AI compute, a fight being waged partly through the startups each side chooses to support. A company like Upstage is a small but legible piece of that competition.
Upstage has built its reputation on language models, including Solar, its open-weight line that has drawn attention outside Korea for its efficiency. The company sells to enterprises that want models they can run locally, a niche that has grown as data-sovereignty concerns spread through Asian markets.
The next few months will determine which path the company takes. The contest result, the state of the fundraising market, and the size of its compute bill will each weigh on the decision. For a six-year-old company that has already outlasted most of its domestic rivals, the question is no longer whether it can raise money, but on what terms, and from whom.
