South Korea Doubles AI and Chip Spending to $16 Billion in Record 2027 Budget
South Korean President Lee Jae Myung proposed a 2027 national budget on November 2 that allocates 21.3 trillion won, about $16 billion, to AI and semiconductor development, nearly doubling the prior year's commitment. The plan includes 4.7 trillion won for frontier AI model development and 2.1 trillion won for power and water infrastructure to support chip manufacturing. Samsung and SK hynix are also planning record corporate investments alongside the government push.
South Korean President Lee Jae Myung presented a record 2027 national budget to the National Assembly on November 2, 2026, with 21.3 trillion won, roughly $16 billion, earmarked for artificial intelligence and semiconductor development.
The allocation nearly doubles the previous year's commitment to these sectors and is part of a broader budget proposal totaling 821 trillion won, a 12.8 percent increase over 2026.
The AI and chip investment is structured around several priorities. The government has set aside 4.7 trillion won for frontier AI projects, with the stated goal of developing a national AI model that reaches world-leading performance. An additional 2.1 trillion won will go toward electricity, water supply, and industrial infrastructure to support the continuous demands of semiconductor manufacturing.
The defense budget, proposed at 73.3 trillion won, an increase of about 8 percent, also incorporates AI, robotics, and drone technology as part of a plan to build what the government describes as a "smart, elite force."
The 2027 budget is part of President Lee's "three mega-projects" initiative, announced in June 2026, which focuses on expanding domestic chip production hubs, building robotics research centers, and constructing gigawatt-scale AI data centers.
Major South Korean companies are moving in parallel. Samsung Electronics and SK hynix are both planning record-level corporate investments within the country, adding private sector momentum to the government's push.
The budget proposal awaits parliamentary approval. President Lee's party holds a majority in the National Assembly, and political analysts expect the proposal to pass.
