South Korea Proposes 21.3 Trillion Won Budget for AI in 2027

South Korea's government aims to significantly boost its investment in artificial intelligence (AI), proposing a budget of 21.3 trillion won ($15.5 billion) for 2027. This marks a substantial increase from the 10.8 trillion won ($7.8 billion) allocated in 2026, representing a 97.2% jump within a single budget cycle. The initiative is part of President Lee Jae-myung's strategy to position the country competitively in the global AI landscape.

Allocation of Funds

The proposed budget focuses on three major projects: semiconductors, physical AI, and domestic AI data centers. The breakdown of the funding is as follows:

• Semiconductors: 3.4 trillion won
• Physical AI (including robotics): 3.1 trillion won
• AI data-center ecosystem support: 500 billion won
• Infrastructure development: 2.1 trillion won
• Frontier AI models and the 'AI for All' initiative: 12.2 trillion won

The largest portion of the budget is allocated for hardware, with 4.7 trillion won earmarked for the purchase of 10,000 next-generation GPUs.

Overall Budget Context

The AI budget is part of a larger proposed budget totaling between 820.9 trillion and 821 trillion won, which reflects a 12.8% increase from the previous year. This stark contrast highlights the government's commitment to advancing AI technology while also addressing broader economic growth.

Private Sector Involvement

In addition to government spending, major South Korean companies have pledged over 800 trillion won for semiconductor manufacturing and 550 trillion won for AI data center construction. This collaboration positions the government as a catalyst for private investment rather than the sole financier.

Future Implications

The proposed budget is expected to create significant demand for hardware and infrastructure, benefiting companies like Samsung and SK Hynix. As the National Assembly prepares to debate the proposal, the outcome will be crucial for the future of South Korea's AI ambitions and its economic landscape.