South Korean AI chip developers Rebellions Inc and Sapeon Korea Inc are pursuing a merger, according to an announcement by Sapeon's parent company, SK Telecom Co, on Wednesday. This merger represents South Korea's latest effort to challenge Nvidia's dominance in the global AI chip market amidst the ongoing boom in artificial intelligence.

SK Telecom stated that the consolidation aims to capture a significant share of the global AI semiconductor market within the next two to three years, a critical timeframe as AI competition intensifies globally. The merged entity will focus on advancing in neural processing units (NPUs) used in AI, with Rebellions Inc taking charge of the management of the new company.

Rebellions Inc, an AI chip startup, launched its ATOM chip last year. This chip was the first NPU developed in South Korea to be utilized in a data center for a large language model (LLM) and entered mass production this year. Sapeon Korea unveiled its next-generation X330 AI chip in November last year.

Given the rapid penetration of AI into various applications, the merger is expected to be finalized during the third quarter of this year, with the combined company set to be launched by the end of the year, according to SK Telecom.