The South Korean government, through the Financial Services Commission, has approved KRW 8.4 trillion (US$ 5.71 billion) to build out the country’s artificial intelligence industry alongside supporting infrastructure. This was done in cumulative investments via the National Growth Fund.
According to a report by Asiatoday, the government will take an equity position in a public-private initiative to construct a national AI computing center equipped with 15,000 GPUs as computing capacity is a key priority. The facility will be run through a special purpose company and is designed to provide shared high-performance computing resources for both industry and research.
The aim is to reduce bottlenecks in training and deploying large-scale AI models according to a report from. Regulators have cleared five new projects spanning AI model development, high-performance computing infrastructure, and industrial supply chains. The latest approvals reflect a shift in focus from isolated technology funding towards building an integrated AI industrial base.
Alongside infrastructure, direct support is being channelled into domestic AI firms. KRW 560 billion (US$ 380 million) will be invested in Upstage, a South Korean AI company focused on large language models, with KRW 100 billion (US$ 68 million) allocated through a strategic industry fund. The investment is intended to strengthen the company’s ability to develop and commercialize foundation models for enterprise use.
The policy package also extends beyond core AI development into enabling systems. Energy infrastructure projects were included in recognition of the rising electricity demand from data centers and compute-heavy AI workloads. Officials are treating power supply constraints as a structural issue that could limit AI expansion if not addressed.
The fund will provide a KRW 250 billion (US$ 170 million) low-interest loan for a new spherical graphite production facility used in battery manufacturing to bolster supply chain resilience. Additional financing will support a company producing high-purity hydrogen fluoride, a material essential for semiconductor production. These investments are aimed at reducing dependence on imported inputs in strategic industries.
A smaller allocation of KRW 85 billion (US$ 58 million) will support expansion in biosimilar production capacity at mid-sized pharmaceutical firms, reflecting parallel efforts to strengthen competitiveness in the biotech sector.
Together, the investments indicate a coordinated push to link AI development with energy systems, materials supply chains, and industrial production capacity, rather than treating it as a standalone technology sector.