South Korea to double spending on AI and chips in 2027

South Korea plans to more than double its spending on artificial intelligence and semiconductors in 2027, according to President Lee Jae Myung's annual budget speech to parliament. The government intends to allocate 21.3 trillion won (US$16 billion) to chipmaking and AI, which is nearly twice the amount allocated this year. This investment aims to transform the military into a smart, elite force by integrating AI, robots, and drones.

North Korea's recent weapon tests, including a new precision-guided torpedo system and an intermediate-range hypersonic missile, which reportedly use AI technology, have heightened tensions. South Korea's tech sector is a powerhouse, with Samsung Electronics and SK hynix being among the world's top memory chip manufacturers. The government plans to invest 4.7 trillion won in frontier AI development projects, with the goal of creating a world-leading AI model.

Additionally, the government will invest 2.1 trillion won in infrastructure, recognizing semiconductors' need for stable power 24/7. The 2027 budget proposal is the largest on record, representing a 12.8 percent increase from the previous year.