South Korea to double spending on AI and chips in 2027

South Korea plans to double its spending on artificial intelligence and semiconductors in 2027, allocating a record high of US$16 billion to the sector, President Lee Jae Myung announced in his annual budget speech to parliament. Aided by the AI boom, the nation is home to two of the world's top three memory chip manufacturers: Samsung Electronics and SK hynix.

The government will invest nearly double the amount spent this year, totaling 21.3 trillion won (US$16 billion), for semiconductors, physical AI, and AI data centers, as well as funding for AI projects. President Lee emphasized that the investments will bolster the country's economic growth potential, aiming to establish a national strategic asset with a world-leading AI model.

The budget proposal, which totals 821 trillion won (a 12.8% increase from the previous year), requires parliamentary approval, likely due to Lee's party majority. Additionally, the defense budget will see an 8.2% increase, with plans to acquire nuclear-powered submarines, KF-21 fighter jets, and develop a smart, elite military force using AI, robots, and drones.