S Korea to double spending on AI, chips next year

RECORD BUDGET: Overall spending is to rise 12.8% to 821 trillion won, with 21.3 trillion won allocated to chips and AI, spanning data center s and robotics

South Korea would double spending on artificial intelligence (AI) and semiconductors next year to a record high, President Lee Jae-myung said yesterday, pledging to use the technology to turn the military into a “smart, elite force.”

Lee in his annual budget speech to parliament said 21.3 trillion won (US$16 billion) would be allocated to chipmaking and artificial intelligence, spanning data centers to robotics.

“We will make bold investments in AI and future growth engines to boost our economy’s growth potential,” he said, adding that the figure was “nearly double this year’s amount.”

South Korean President Lee Jae-myung delivers a speech at the National Assembly in Seoul yesterday.

Photo: Bloomberg

On the defense budget, the government wants to see an increase of about 8 percent from this year to 73.3 trillion won, aiming to secure nuclear-powered submarines and KF-21 jets.

Seoul aims to “rapidly transform our military into a smart, elite force by establishing integrated manned and unmanned systems based on AI, robots and drones,” Lee said.

North Korea has recently tested a slew of weapons, including a new precision-guided torpedo system and an intermediate-range hypersonic missile, both of which it said used AI technology.

Last year, Seoul announced an agreement with Washington to build nuclear-powered submarines, with Pyongyang slamming the submarine program as a “dangerous attempt at confrontation.”

Overall, next year’s budget plan totals 821 trillion won, a 12.8 percent increase on-year, making it the largest budget proposal on record.

Lee now needs parliament to pass the budget proposal, which is likely given his party’s majority.

Lee said the government would invest 4.7 trillion won to support “frontier AI development projects, with the aim of achieving world-leading performance for our own AI model, a national strategic asset.”

In June, Lee announced a public-private partnership centered on “three mega-projects” — aiming to expand chip production hubs nationwide, establish robotics research and development centers, and build gigawatt-scale AI data centers.

The government at the time unveiled plans for nearly US$1.2 trillion in investment, equivalent to more than two-thirds of South Korea’s GDP.

Samsung and SK Hynix also in June announced plans to invest more than 4,755 trillion won in South Korea, marking a record level of corporate investment in the country.