South Korea Nearly Doubles AI Budget to 21.3 Trillion Won for 2027
3 min readSouth Korea plans to spend 21.3 trillion won, about $16 billion, on artificial intelligence and three related megaprojects in 2027, nearly double this year’s level. President Lee Jae Myung laid out the South Korea AI budget in his address to the National Assembly on November 2, calling for the country to “invest boldly in artificial intelligence and future growth engines.”
A record South Korea AI budget inside a record budget
The AI money sits inside a proposed 820.9 trillion won national budget, the largest in the country’s history and 12.8 percent bigger than the 2026 budget, which was itself a record. Korea has leaned hard into AI since Lee took office in 2025, and the 2027 plan turns that posture into line items.
Where the money goes
The 21.3 trillion won covers AI investment plus three megaprojects: semiconductors, physical AI, and AI data centers. According to the Seoul Economic Daily, 4.7 trillion won goes to frontier AI development, with the stated goal of a homegrown model that reaches world-leading performance and is treated as a national strategic asset. Two trillion won funds semiconductor production capacity, including early operation of fabs around Seoul and a new southwestern cluster, and a special account for chip competitiveness will be created.
Another 2.1 trillion won goes to power, water, and industrial park infrastructure so that, in Lee’s words, companies “do not miss their investment windows because of inadequate infrastructure.” Physical AI gets 500 billion won for field demonstrations across eight sectors, from smart factories to defense. The government also plans to train 2,000 chip design specialists and expand AI education from students through working adults.
Beyond the AI line, research and development rises to a record 39.5 trillion won, and 13.8 trillion won backs ten next-generation strategic technologies meant to follow semiconductors as the next growth engine. A separate 162 trillion won future fund, financed by windfall tax revenue from the chip boom, is meant to stabilize public finances while funding long-term bets.
Why it matters
Korea already hosts two of the world’s three largest memory makers, Samsung and SK hynix, whose high-bandwidth memory feeds nearly every AI accelerator shipped. The budget signals that Seoul wants to move up the stack from supplying components to owning sovereign models, data centers, and robotics. It also arrives as AI stocks wobble: Samsung and SK hynix both fell more than 3 percent in pre-market trading on November 3 as investors questioned AI profitability.
Passage is likely, since Lee’s Democratic Party holds a majority and has promised to meet the December 2 legal deadline. The opposition People Power Party objects, with lawmakers protesting the future fund as “future debt” on top of 1,400 trillion won in state obligations.
Watch for the first frontier model procurement calls and the data center site selections that this budget unlocks in early 2027.