South Korea to double spending on AI and chips in 2027

Seoul, South Korea - President Lee Jae Myung announced in his annual budget speech that the country will double spending on artificial intelligence (AI) and semiconductors for 2027, reaching a record high of US$16 billion. The nation, home to Samsung Electronics and SK hynix, are among the world's three largest producers of memory chips, which are in high demand due to the AI boom.

The budget allocates 21.3 trillion won (US$16 billion) for semiconductors, physical AI, and AI data centers, nearly double the current amount. Additionally, the government plans to invest 4.7 trillion won to support frontier AI development projects, aiming to achieve world-leading performance for their own AI model, a national strategic asset.

The overall budget for 2027 totals 821 trillion won, a 12.8% increase from this year, making it the largest budget proposal on record. Lee now needs approval from parliament, which seems likely given his party's majority. In defense spending, the president aims for an 8.2% increase from this year, totaling 73.3 trillion won, to create a smart, elite military force based on AI, robots, and drones.