South Korea's president unveiled the country's largest ever budget on Monday and pledged to boldly invest in AI and future growth engines.
By the numbers: Total 2027 spending rises 12.8% to 820.9 trillion won, about $610 billion, including 21.3 trillion won for semiconductors, physical AI and AI data centers, nearly double the 2026 level.
Zoom in: A separate 4.7 trillion won is earmarked for a sovereign AI model that Lee described as having the world's highest performance.
- The plan also funds training for 2,000 specialists to "lead semiconductor design and the regional semiconductor industry," alongside expanded AI education for students, job seekers and current workers.
The backstory: Korean universities already run contract departments where companies help design courses and recruit graduates into firms such as Samsung Electronics and SK Hynix before they finish their degrees.
The big picture: Chip exports are powering the economy: October shipments hit a record $115.3 billion, up 93.7% year on year, and the first ten months totalled $930 billion, passing $900 billion for the first time.
- October produced a $42.5 billion trade surplus even as imports rose 36% to $72.8 billion, and Lee said annual exports of $1 trillion are within reach.
Yes, but: Lee told lawmakers the higher spending would mean virtually no net increase in government debt, with newly issued bonds used to repay existing debt.
What's next: Defense spending rises 8.2% to 73.3 trillion won to build what Lee called a smart, elite and powerful military based on AI, robots and drones.
Why it matters: A single budget line of 21.3 trillion won for chips and AI sets a marker for what a national AI program now costs, and the IMF expects the Korean economy to grow 3.3% in 2026, its fastest since 2021.
