Gangnam is a posh district in South Korea's capital Seoul and the song is said to mock the consumerism in the area.
The dance stylizes an affluent person riding a horse. The horseplay has become a global hit with the song hitting top charts in many countries.
Psy, whose real name is Park Jai-sang, is the son of the head of a Korean electronics firm.
Reuters, a newswire said his parents sent him to business school in the US but he bought musical instruments with tuition money and later graduated from Berklee College of Music in Boston.
The report quoted Matt Fiorentino, from Visible Measures, an online tracking firm as saying that 'Gangnam Style' and its related video had generated 2.2 billion hits.The original video overtook Bieber's 803 million hit record for 'Baby' on Saturday.