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South Korea allocates record budget to develop sovereign AI model and semiconductor industry
Key points
- South Korea's 2027 budget increases 12.8% to 820.9 trillion won.
- 21.3 trillion won allocated for semiconductors, physical AI, and AI data centers.
- 4.7 trillion won designated for sovereign AI model development.
- Plans include training 2,000 semiconductor specialists and expanding AI education.
Record Budget for AI and Semiconductors
South Korean President Lee Jae Myung announced the country's largest budget to date, totaling 820.9 trillion won ($610.14 billion) for 2027, representing a 12.8% increase. A significant portion of this budget, 21.3 trillion won, is earmarked for investments in semiconductors, physical AI, and AI data centers, nearly doubling the allocation from 2026.
Additionally, 4.7 trillion won will be specifically directed towards the development of a sovereign AI model, which President Lee described as aiming for the "world's highest performance."
Talent Development and Industry Support
The government plans to invest in talent development to support these technological ambitions. This includes training 2,000 specialists to lead the semiconductor design and regional semiconductor industry. AI education will also be expanded for students, job seekers, and existing workers.
South Korea has established university "contract departments" that offer company-linked degrees, providing students with pathways to employment at major firms like Samsung Electronics and SK Hynix before graduation. Companies contribute to course design, financial support, and recruitment of graduates.
Economic Context and Growth
This record spending plan aligns with the International Monetary Fund's forecast of a 3.3% economic growth for South Korea in 2026, which would be its fastest pace since 2021. President Lee stated that the increased spending would result in "virtually no net increase in government debt," with new bonds used to repay existing debt.
South Korea's economic growth has been significantly driven by semiconductor exports, fueled by rising global demand for computing power due to the AI boom. Exports surged 93.7% year-on-year to a record $115.3 billion in October, with total shipments reaching $930 billion in the first ten months of 2026, surpassing the $900 billion mark for the first time.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
South Korea announced its largest-ever budget, increasing total spending by 12.8% to 820.9 trillion won for 2027. This includes 21.3 trillion won for semiconductors, physical AI, and AI data centers, nearly doubling the 2026 allocation, and 4.7 trillion won specifically for developing a sovereign AI model. The investment aims to secure a leading position in AI technology and support economic growth driven by semiconductor exports.