South Korea plans to invest 21.3 trillion won, or nearly $16 billion, in artificial intelligence and related technology projects, President Lee Jae Myung said in an address to parliament on Monday. The proposed investment is nearly double this year’s amount.
The funding would cover semiconductors, physical AI and AI data centres, which Lee described as three major projects. He also outlined a separate 4.7 trillion won investment for frontier AI development.
Funding includes research into a domestic AI model
Lee said the frontier AI projects aim to achieve “world-leading performance” for South Korea’s own AI model. He described the model as a national strategic asset.
The 21.3 trillion won figure is equivalent to about €14.3 billion and $15.97 billion, according to the figures provided in the address. The government’s plans form part of a broader proposed increase in public spending for 2027.
2027 spending proposal requires parliamentary approval
The administration has proposed total government spending of 820.9 trillion won for next year, a 12.8% increase. The proposal is a record budget plan, but it still requires approval from parliament.
Lee’s Democratic Party of Korea currently holds a parliamentary majority. The budget address did not, by itself, make the proposed spending final.
South Korea is the world’s fourth-largest economy in Asia and is home to major memory chip manufacturers Samsung Electronics and SK Hynix. Demand for memory chips has risen amid the expansion of AI, the source report said.
Chip exports contributed to recent growth
South Korea recorded faster-than-expected economic growth in the third quarter, driven by chip exports and investment. The report did not provide a growth rate.
Exports reached $930 billion between January and October, putting the country on course to exceed $1 trillion for the year, according to the figures cited in the report. If achieved, South Korea would be the fourth country to pass that threshold, after the United States, China and Germany.
The planned AI spending therefore sits alongside a strong export performance in a sector tied to the technology boom. The government’s proposal allocates funds to both AI development and semiconductor-related projects, while the scale and final terms of the 2027 budget depend on parliamentary approval.
Reid Bentley