South Korea Proposes Nearly $16 Billion for AI and Semiconductors in Record 2027 Budget

The update

South Korean President Lee Jae Myung used his annual budget address to parliament on Monday to propose investing 21.3 trillion won, nearly $16 billion and almost twice this year’s amount, in artificial intelligence and three megaprojects covering semiconductors, physical AI and AI data centres. That includes 4.7 trillion won for frontier AI development, aimed at a world-leading national AI model. The plan sits inside a record 2027 budget proposal of 820.9 trillion won, up 12.8 percent on this year, which parliament must approve.

Why it matters

South Korea is Asia’s fourth-largest economy and home to Samsung Electronics and SK Hynix, two of the world’s biggest memory chip makers. Demand for memory chips has soared in the AI boom, exports are on track to pass $1 trillion this year, and the government wants to channel that semiconductor windfall into a lasting lead in AI models, chips and data centres rather than one-off gains.

What to watch

The National Assembly, where Lee’s Democratic Party holds a majority, must pass the budget, with a legal deadline of December 2. Opposition parties have questioned the fiscal implications of a proposed future fund financed by semiconductor tax revenue, so the final AI allocation could still shift in debate.

Sources

• dw.com — confirms the 21.3 trillion won AI and semiconductor plan, the 4.7 trillion won frontier AI allocation and the record overall budget
• ajupress.com — confirms Lee’s budget address, the 820.9 trillion won total, the December 2 deadline and the AI megaprojects