South Korea Commits $15.97 Billion to AI in Record Budget Proposal
South Korea has proposed 21.3 trillion won (about $15.97 billion) for artificial intelligence and three major technology projects in its 2027 budget, as President Lee Jae Myung seeks to strengthen the country’s position in the global technology race. The proposed South Korea AI investment package covers AI, semiconductor development, physical AI and AI data centres, and is nearly twice the amount allocated this year.
Lee outlined the spending plan in an address to the National Assembly on November 2, urging lawmakers to approve a record 820.9 trillion won budget for 2027. The overall spending proposal represents a 12.8% increase from this year. It has been submitted to parliament and is not yet an approved budget.
South Korea AI investment targets four strategic areas
The 21.3 trillion won allocation combines investment in AI with three megaprojects: semiconductors, physical AI and AI data centres. The plan reflects the government’s intention to build capacity across the technologies and infrastructure that support advanced AI systems, from chip manufacturing and computing facilities to machines that can operate in the physical world.
The spending comes as demand for advanced chips used in AI systems has lifted exports and earnings at major South Korean memory manufacturers, including Samsung Electronics and SK Hynix. The country’s exports reached $930 billion between January and October, putting the government’s $1 trillion annual export target within reach, Reuters reported.
Record 2027 budget includes wider technology funding
Beyond the 21.3 trillion won package, Lee highlighted a proposed 162.3 trillion won Future Response Fund. The fund is designed to support future growth industries, young people, regional development and education, and is expected to draw substantially on additional tax revenue generated by the semiconductor boom.
The government also plans to spend 13.8 trillion won on 10 strategic technology sectors and 4.6 trillion won to secure a high-performance sovereign AI model, Yonhap reported. These are separate figures in the broader technology and innovation spending plan and should not be added to the 21.3 trillion won package without considering possible overlaps in the budget structure.
South Korea links AI spending with chip and data-centre expansion
The proposed investment is part of a wider effort to turn the country’s semiconductor strength into a broader technology advantage. Samsung and SK Hynix are leading a major private-sector chip development programme in the country’s southwest, while the government is placing physical AI and data-centre infrastructure alongside semiconductor manufacturing in its national priorities.
The approach recognises that AI development depends on more than software models. It also requires advanced processors, memory, power, computing facilities and systems that can connect digital intelligence with physical tasks. The South Korea AI investment plan brings these areas together in an effort to strengthen several parts of the technology supply chain.
Budget proposal still requires parliamentary approval
Lee has asked lawmakers to pass the 2027 budget by December 2, the statutory deadline. The proposal also includes a 162.3 trillion won Future Response Fund and increased spending across other areas, while the government says it expects the fiscal deficit to narrow.
The final allocations could change during parliamentary review. For now, the 21.3 trillion won plan signals the scale of South Korea’s intended commitment to AI and related infrastructure, but its implementation will depend on the budget’s approval and the government’s ability to deliver the projects.
