South Korea Announces Massive AI Investment Push with $7 Billion Budget Increase

South Korean president calls for aggressive AI spending in budget speech

SEOUL, South Korea (AP) -- South Korean President Lee Jae Myung on Tuesday called for tripling the government spending on projects for expanding artificial intelligence infrastructure and technology in a budget speech. Lee also called for lawmakers to approve a planned 8.2% increase in defense spending next year, which he said would help modernize the military's weapons systems and reduce its reliance on the United States, as the allies' military chiefs met in Seoul for annual security talks. Most conservative opposition lawmakers boycotted Lee's speech amid an ongoing rift over a criminal investigation into former President Yoon Suk Yeol's brief imposition of martial law in December. Lee's speech came after South Korea last week hosted the leaders of major Pacific Rim nations for this year's Asia-Pacific Economic Cooperation meetings, which his government used to showcase its ambitions for AI and advance an effort at a trade deal with the U.S. In his speech at the National Assembly, Lee highlighted his APEC diplomacy and a bilateral meeting with U.S. President Donald Trump, which he said eased uncertainties facing South Korea's trade-dependent economy by securing lower tariffs on automobiles and computer chips, two of the country's key exports. He said the country was still facing a critical moment for "national survival" amid rapid changes in the global trade order and a "huge, transformative wave of AI." Lee said the proposed budget of 728 trillion won ($506 billion), which would represent an all-time high for government spending, would be the country's "first budget to open the AI era." He called on the liberal-led legislature to approve 10.1 trillion won ($6.9 billion) in AI-related spending -- more than triple this year's level -- to advance the country's AI computing and manufacturing capabilities, with a particular focus on industries such as semiconductors, automobiles, shipbuilding and robotics. "Just as President Park Chung-hee paved the highway for industrialization and President Kim Dae-jung built the highway for the information age, we must now construct the highway for the AI era to open a future of progress and growth," Lee said, referring to major development drives under Park's dictatorship in the 1960s and '70s and Kim's presidency from 1998 to 2003, which focused on expanding South Korea's internet infrastructure. Lee said South Korean companies would have little difficulty securing the chips for their AI projects, citing a deal for Nvidia, whose GPUs power much of the global AI industry, to supply 260,000 graphics processing units for AI infrastructure projects with major South Korean businesses and the government. The deal was announced following a meeting during APEC between Lee and Jensen Huang, the Silicon Valley company's chief executive. It isn't immediately clear when Nvidia -- which agreed to deliver 50,000 GPUs each to the government, chipmakers Samsung and SK, and automaker Hyundai, and another 60,000 to internet company Naver -- will deliver those chips. Huang told reporters in South Korea that AI data centers and power networks must first be established before the company can begin shipping the GPUs. Concerns have grown over the projects' future after Trump said aboard Air Force One on Monday that only U.S. customers should have access to Nvidia's latest Blackwell AI chips, declaring, "We don't give that chip to other people." Lee proposed a defense budget of 66.3 trillion won ($46 billion) next year, which he said will be focused on modernizing the military's weapons systems, including through the adoption of AI technologies, to make the armed forces more self-reliant. "It's a matter of national pride that South Korea, which spends 1.4 times North Korea's annual GDP on defense and is perceived as the world's fifth most powerful military, continues to depend on others for its security," Lee said. During his meeting with Trump, Lee reaffirmed South Korea's commitment to increase defense spending and called for U.S. support for South Korean efforts to acquire nuclear-powered submarines. Trump later said on social media that the United States will share closely-held technology to allow South Korea to build a nuclear-powered submarine, and that the vessel will be built in the Philly Shipyard in Philadelphia, which was bought last year by South Korea's Hanwha Group. Lee's speech came as U.S. Defense Secretary Pete Hegseth and South Korean Defense Minister Ahn Gyu-back were meeting in Seoul for the allies' annual security talks. The meeting is expected to address key alliance issues, including South Korea's defense spending commitments and the implementation of a plan to transfer wartime operational control to a joint command led by a South Korean general with a U.S. deputy.

South Korea to triple AI spending, boost defence budget

Seoul (AFP) - South Korea will triple spending on artificial intelligence and make its biggest defence budget increase in six years, President Lee Jae Myung said Tuesday in his annual parliamentary budget speech. Lee said 10.1 trillion won ($7 billion) would go towards "a major transformation aimed at propelling South Korea into the ranks of the world's top three AI powers" alongside the United States and China. "We will significantly expand investment to usher in the 'AI era'," he said, noting the amount was more than three times the current year's AI-related budget. The proposal was made in a speech outlining his government's spending plans for 2026. Overall, the budget plan totals 728 trillion won, an 8.1 percent increase from this year. Lee now needs parliament to pass the budget proposal, which is likely given his party's majority. On the defence budget, the president said his government wants to see an 8.2 percent increase from this year to 66.3 trillion won. If passed, it will mark the highest defence spending increase since 2019. "We will overhaul conventional weapons systems into state-of-the-art systems suited for the AI era and swiftly transform our military into an elite, smart force," Lee said. AI infrastructure Of next year's AI budget, 2.6 trillion won "will be invested in introducing AI across industry, daily life and the public sector, while 7.5 trillion won will go towards talent development and infrastructure building", Lee said. South Korea is home to two of the world's leading memory chip makers, Samsung Electronics and SK hynix. The two tech giants manufacture chips essential for AI products and the power-hungry data centres that the fast-evolving industry relies on. Jensen Huang, the CEO of US chip titan Nvidia, announced last week plans to supply 260,000 of the firm's most advanced chips to South Korea. After the announcement on Friday, Huang described that goal as "ambitious". But, he said, "there's no reason why Korea cannot achieve it -- you have the technology, you have the software expertise and you also have a natural ability to build manufacturing plants". The US, a key military ally, stations about 28,500 troops in South Korea to help it fend off military threats from the North. Since taking office in June, Lee has vowed to "respect" North Korea's political system and pursue dialogue without preconditions, in a sharp break with the policies of his hawkish predecessor. Lee noted on Tuesday that South Korea already spends "1.4 times North Korea's annual GDP" on defence alone and is "ranked fifth in global military strength". Seoul and Pyongyang technically remain at war as the 1950-53 Korean War ended in armistice, not a peace treaty.

South Korea triples AI spending in 2026 budget plan

President Lee Jae Myung announced South Korea will triple its AI funding to 10.1 trillion won ($7 billion), aiming to join the world's top three AI nations. The 2026 budget proposal focuses on boosting investment, expanding technology use, and positioning the country as a global leader alongside the US and China. South Korea will triple spending on artificial intelligence, developing infrastructure and encouraging adoption of the technology, President Lee Jae Myung said Tuesday in his annual parliamentary budget speech. Lee said 10.1 trillion won ($7 billion) would go towards "a major transformation aimed at propelling South Korea into the ranks of the world's top three AI powers" with the United States and China. "We will significantly expand investment to usher in the 'AI era'," Lee said, noting that the amount was more than three times the current year's AI-related budget. The proposal was made in a speech outlining his government's spending plans for 2026. Overall, the budget plan totals 728 trillion won -- an 8.1 percent increase from this year. Lee needs a majority vote in parliament to pass his budget proposal, which is likely given his party's majority. South Korea is home to two of the world's leading memory chip makers, Samsung Electronics and SK hynix. The two tech giants manufacture chips essential for AI products and the power-hungry data centres that the fast-evolving industry relies on. Both firms recently signed preliminary deals with ChatGPT maker OpenAI to provide chips and other equipment for its Stargate AI infrastructure project. Lee said 2.6 trillion won of next year's AI budget "will be invested in introducing AI across industry, daily life and the public sector, while 7.5 trillion won will go towards talent development and infrastructure building". Jensen Huang, the CEO of US chip titan Nvidia, announced last week plans to supply 260,000 of the firm's most advanced chips to South Korea. After the announcement on Friday, Huang described that goal as "ambitious". But, he said, "there's no reason why Korea cannot achieve it -- you have the technology, you have the software expertise and you also have a natural ability to build manufacturing plants".

Lee vows to usher in 'AI era' as he calls for support for 728 trillion won budget plan

South Korean President Lee Jae Myung issued a call Tuesday for cooperation across party lines to pass a 2026 budget by the legally established deadline, calling it the "first budget plan ushering in the AI era." In a presidential address on the 2026 budget plan delivered at the National Assembly that day, Lee asked for the plan's passage within the deadline. "Just as President Park Chung-hee set down the industrialization highway and President Kim Dae-jung created the highway for informatization, we now need to build a highway for the AI era," he stressed. Lee also said that the year 2026 would mark a "historic starting point for ushering in the AI era and preparing for the next 100 years of the Republic of Korea." Emphasizing the urgency of the issue, he said, "In the artificial intelligence era, a day of delay means being left a generation behind." At 728 trillion won, the 2026 budget plan submitted to the National Assembly by the administration was the largest ever. Lee explained that the administration had "boldly developed an absolutely essential budget while drastically cutting budget items that were inessential or not urgent." Among the core budget content that he described was 10.1 trillion won in connection with AI, 35.3 trillion won in R&D investment for high-tech industries, and 66.3 trillion won for national defense. At more than 10 trillion won, the AI budget presented to the National Assembly was over three times larger than the 2025 budget of 3.3 trillion won. Explaining the increase, Lee said the administration's aim was "focused investment to make ours a leading nation in physical AI" -- referring to AI combined with technology such as robots, drones and self-driving vehicles. The historically high R&D investment budget also marked a 19.3% increase from its 2025 level. Lee explained that the 8.2% increase in the national defense budget from this year's level of 59.4 trillion won was meant to "achieve historical improvements in our defense capabilities and allow for autonomous defense by rapidly transforming our military into elite smart forces." He argued that "the Republic of Korea's reliance on the outside for national defense when it is rated as boasting the world's fifth-strongest military capabilities is a matter of national pride." His remarks showed his commitment to honoring his previous pledge to recover wartime operational control for South Korea within his term. The plan also included increased spending to protect the socially disadvantaged and vulnerable. Lee stressed that it was the "basic duty of the state to protect the socially disadvantaged and vulnerable people who bear the shock of changing times the fastest and hardest." As areas where the budget would be increased, he referred to increased livelihood benefits for low-income segments, efforts to establish a stronger base for self-sufficiency among disabled people, and prevention and rapid response for disasters. The opposition People Power Party boycotted the speech on Tuesday entirely, protesting the arrest warrant request for former floor leader Choo Kyung-ho by a special counsel investigating the December 2024 insurrection attempt. After making the decision to boycott at a general lawmakers' meeting that morning, party members gathered on the staircase of the National Assembly's central hall to stage a protest. Lee nodded briefly before the lawmakers before heading to the offices of the National Assembly speaker, where he was scheduled to have a preliminary conversation. PPP leader Jang Dong-hyuk also boycotted meetings of the ruling and party leadership and the heads of the "five major branches" -- the National Assembly speaker, Supreme Court chief justice, Constitutional Court chief justice, prime minister, and National Election Commission chairperson -- which took place in the speaker's offices. In response, Lee issued a call for cooperation across party lines. "While there may be differences in views between the ruling and opposition parties, I believe they are no different in their sincerity about serving the people and nation," he said.

Nat'l budget boosts AI drive - The Korea Times

President Lee pushes W728 trillion budget, partisan sparring expected Fresh from the success of last week's Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, North Gyeongsang Province, President Lee Jae Myung has announced his administration's 728 trillion won ($525 billion) budget, which includes a massive push to advance the development and applications of artificial intelligence (AI). Asking for bipartisan cooperation to approve the largest national budget by Dec. 2, Lee highlighted 10.1 trillion won allocated to position Korea as one of the world's leading AI powerhouses. That amount is more than triple the AI budget for this year. Despite talk of an "AI bubble," the administration and Korean businesses have been advancing sovereign AI initiatives rapidly, a move that Nvidia appears to back by pledging to supply the Korean government and four major conglomerates with 260,000 coveted graphics processing units. With industries and technology racing along a steep curve toward AI, the government's budget appears increasingly justified. "It is Korea's first budget to open the era of AI," the president said, likening his agenda to the industrialization driven by former President Park Chung-hee and the digital modernization championed by former President Kim Dae-jung. The budget for R&D rose nearly 20 percent to 35.3 trillion won, helping a sector that struggled under the sharp cuts implemented by former President Yoon Suk Yeol. While the massive budget boosts the AI initiative, the president has also prioritized helping the socially vulnerable, who are "... most impacted by social changes," and strengthening self-defense, thereby sending a subtle signal regarding the planned transfer of wartime operational control from the U.S. Tuesday's scene at the National Assembly served as a reminder that the "do or die" bickering, which had largely been forgotten during last week's APEC summit, could slow or complicate the approval of the national budget. The main opposition People Power Party (PPP) boycotted the president's address to protest the special prosecution's move to seek a detention warrant for the party's former floor leader, Choo Kyung-ho, over his alleged role in the Dec. 3 martial law declaration. PPP chief Rep. Jang Dong-hyeok described the situation as "war" over what he alleged was oppression of the opposition, while some PPP legislators shouted crude remarks as the president entered the chamber. The scene recalled a time when the ruling Democratic Party of Korea (DPK), then in opposition, boycotted then-President Yoon Suk Yeol's address amid an investigation into Lee. It would be short-sighted not to capitalize on the momentum from Korea's successful hosting of the APEC summit to enhance national prestige. Now is the time for the Assembly to set aside partisan disputes and seriously consider advancing the country into the AI era, as well as addressing other critical matters such as finalizing the Korea-U.S. tariff agreement. The National Assembly has a critical role in overseeing the budget. The two main parties should examine each item and make decisions guided by the national interest, rather than by party agendas. The subtle but growing pressure on the president and his administration to demonstrate cooperation and compromise in domestic politics should be actively embraced. The PPP is also not exempt from the responsibilities of cooperation and compromise. To fund the 728 trillion won budget, the government may need to issue additional state credits, which could raise the national debt above 50 percent of GDP. Producing and managing a national budget, therefore, must be guided by whether the government can provide the necessary resources and manage them with financial soundness and balance. With local elections in Korea approaching, legislators should be wary of excessive pork-barreling.