South Korea to pour billions into AI

South Korea plans to invest nearly $16 billion in artificial intelligence and semiconductors, according to Lee Jae Myung's annual budget address to parliament. The country will allocate 21.3 trillion won (€14.3 billion, $15.97 billion) to AI and three megaprojects: semiconductors, physical AI, and AI data centres. An additional 4.7 trillion won will be invested in frontier AI development projects to achieve world-leading performance for South Korea's AI model, a national strategic asset.

This marks a 12.8% increase in government spending for next year, totaling 820.9 trillion won (€551.5 billion, $615.62 billion), which requires parliamentary approval. As Asia's fourth-largest economy and home to two of the world's largest memory chip makers, Samsung Electronics and SK Hynix, South Korea's AI boom has driven demand for memory chips, leading to a record economic growth in the third quarter, with exports reaching $930 billion.