South Korean President Lee Jae Myung revealed the country’s largest ever budget for 2027 with spending on digital infrastructure, including physical artificial intelligence (AI), AI data centers, and semiconductors set to nearly double compared to 2026.
Speaking to the National Assembly on Monday, Lee announced that total spending would rise 12.8 percent to KRW 820.9 trillion (US$ 610.14 billion). Of that figure, CNBC reports that KRW 21.3 trillion (US$ 15.83 billion) has been set aside for physical AI, AI data centers, and semiconductors. A further KRW 4.7 trillion (US$ 3.5 billion) has been earmarked to develop a sovereign AI model.
“It is not enough for the national economy to simply grow. Those outcomes must connect to opportunities and changes in the lives of each and every citizen. We will create opportunities for youth to take on challenges, provide small business owners with the strength to rise again, and build new engines of growth for our regions,” the president said in a statement posted to X.
The South Korean government will also train 2,000 specialists to lead semiconductor design and the wider chip industry. Students at some South Korean universities will be given the opportunity to enroll in company-linked degrees that provide a pathway to employment at the likes of Samsung Electronics and SK Hynix.
South Korea’s Ministry of Trade, Industry and Resources reported on Sunday, November 1, that monthly exports had hit an all-time high, with cumulative exports for the year so far surpassing US$ 900 billion. Semiconductors posted the highest exports for any October on record. The President said that the country was within reach of achieving US$ 1 trillion in annual exports.
Importantly, Lee has said that the increased government spending for 2027 would result in virtually no net increase in government debt as it would lean on newly issued bonds to repay existing debt.
In June, President Lee announced three megaprojects aimed at strengthening South Korea’s competitiveness in advanced technologies. Among the projects is a national AI data center program, which includes an 8.4 GW facility set to be built by 2029 in partnership with the private sector.