South Korea unveils record budget focusing on AI and chips
What's the story
South Korea has announced its largest-ever budget for 2027, with a major focus on artificial intelligence (AI) and semiconductors. The country plans to spend 820.9 trillion won ($610.14 billion), a 12.8% increase from the previous year. President Lee Jae Myung made the announcement during his address to the National Assembly on Monday, emphasizing plans to "boldly invest in AI and future growth engines."
Budget breakdown
Sovereign AI model in the works
The proposed budget includes a whopping 21.3 trillion won for semiconductors, physical AI, and AI data centers, almost double the amount allocated in 2026.
A separate chunk of 4.7 trillion won has been earmarked for developing a sovereign AI model with "world's highest performance."
This ambitious move is part of South Korea's strategy to remain at the forefront of global tech innovation.
Skill development
Training the workforce of tomorrow
Along with infrastructure, the South Korean government also plans to invest heavily in human resources.
The budget includes provisions to train 2,000 specialists who will lead "semiconductor design and the regional semiconductor industry."
There are also plans to expand AI education for students, job seekers, and existing workers.
This holistic approach indicates a long-term vision for sustainable growth in these sectors.
Economic impact
Semiconductor exports surge amid global AI demand
South Korea's economy is projected to grow 3.3% in 2026, its fastest pace since the post-pandemic rebound in 2021, according to the International Monetary Fund.
The country's strong economic growth has been largely fueled by semiconductor exports amid rising global demand for computing power due to the AI boom.
Exports surged a record 93.7% year-on-year to $115.3 billion in October alone, data from the Korea Customs Service revealed on Sunday.