Skip to content
Neural Daily

BusinessNews

South Korea's record budget targets a sovereign AI model

🇭🇺 Olvasd el magyarul →

South Korea's 2027 budget is its largest ever, nearly doubling spending on semiconductors, physical AI and AI data centers. A separate 4.7 trillion won is earmarked for a sovereign AI model with what the president calls the world's highest performance.

By: Mikola Máté Patrik · · 2 min read

Seoul skyline with the 63 Building on Yeouido across the Han River
Image: USAGI_POST / Pixabay · CC0 · CC0, originally published on Pixabay, via Wikimedia Commons · Source

The numbers

President Lee Jae Myung presented the 2027 budget to the National Assembly on Monday (CNBC). Total spending rises 12.8% to 820.9 trillion won (about $610 billion). It includes:

  • 21.3 trillion won (about $15.8 billion) for semiconductors, physical AI and AI data centers, nearly double the 2026 level.
  • A separate 4.7 trillion won (about $3.5 billion) for a sovereign AI model that Lee says should have the world's highest performance.
  • Training for 2,000 chip design and regional semiconductor specialists, plus wider AI education for students, job seekers and workers.
  • Defense spending up 8.2% to 73.3 trillion won, aimed at a hybrid manned and unmanned force built on AI, robots and drones.

Lee said the plan means virtually no net increase in government debt, as new bonds will repay existing ones.

Why Korea can afford it

AI-driven chip demand is powering the economy. Exports jumped 93.7% in October to a record $115.3 billion, and shipments reached $930 billion in the first ten months. The IMF expects 3.3% growth in 2026, the fastest since 2021. Samsung and SK Hynix memory chips are one of the key bottlenecks in AI infrastructure.

Altman dropped by

Over the weekend, Sam Altman made an unannounced visit to South Korea (CNBC). Samsung said he met about 50 executives in Yongin, and Korean media reported a lunch with SK Group chairman Chey Tae-won. Talks likely covered HBM supply and Korean AI data centers under the existing Stargate partnerships, though neither side gave details.

What it means

Sovereign models are no longer just a European theme. Korea wants both its own frontier model and its place as a key supplier to US labs. $3.5 billion is a lot for model development, but modest next to a frontier lab's annual compute bill. Whether the world-leading goal is realistic will become clear over the next year or two.

    Produced with the help of AI, reviewed by an editor. How we make our articles

    Reviewed and edited by the Neural Daily desk. About

    Related articles