South Korea earmarks nearly $16 billion for AI and semiconductor megaprojects
President Lee Jae Myung unveiled a record 2027 budget that doubles AI spending to 21.3 trillion won.
Record budget targets AI and chips
President Lee Jae Myung told parliament that South Korea will allocate 21.3 trillion won (approximately €14.3 billion or $15.97 billion) to artificial intelligence and three megaprojects: semiconductors, physical AI and AI data centres.
The plan includes a dedicated 4.7 trillion won investment for “frontier AI development projects” aimed at delivering a world‑leading performance for a national AI model, which the administration describes as a strategic asset.
Spending surge across the board
The budget proposal represents a 12.8% increase in total government outlays, bringing the figure to 820.9 trillion won (about €551.5 billion or $615.62 billion). The proposal now awaits approval from the National Assembly, where the Democratic Party of Korea holds a majority.
Economic backdrop
South Korea, the fourth‑largest economy in Asia and home to memory‑chip giants Samsung Electronics and SK Hynix, has seen faster‑than‑expected growth in the third quarter, driven by chip exports and investment.
Exports from January to October totalled $930 billion, putting the nation on track to exceed $1 trillion in annual exports—a milestone previously reached only by the United States, China and Germany.
With the AI boom fueling demand for memory chips, the government’s hefty allocation underscores a strategic push to cement South Korea’s position in both AI and semiconductor arenas.
