Governments are now competing in AI with budgets, not just policies.
South Korean President Lee Jae Myung unveiled the country’s largest-ever budget on Monday, pledging to “boldly invest in AI and future growth engines.” Total spending for 2027 would rise 12.8% to 820.9 trillion won, or about $610 billion, CNBC reports.
Where the AI money goes
The plan includes 21.3 trillion won for semiconductors, physical AI and AI data centers, nearly double the 2026 level. A separate 4.7 trillion won would fund a sovereign AI model with what Lee called the “world’s highest performance.”
The government also plans to train 2,000 specialists in semiconductor design and regional chip industries, and to expand AI education for students, job seekers and workers. Defense spending would rise 8.2% to 73.3 trillion won, with plans for AI-, robot- and drone-based systems.
Riding a chip export boom
The budget comes as semiconductor exports power South Korea’s economy. Exports jumped 93.7% year over year to a record $115.3 billion in October, according to the Korea Customs Service. Lee said the higher spending would cause “virtually no net increase in government debt.” The budget still needs parliamentary approval.
Why it matters
Sovereign AI programs are turning governments into major buyers of compute, chips, data center capacity and AI services, alongside the big cloud providers.
For tech companies, public-sector and national AI programs in South Korea and elsewhere are a growing pipeline. Vendors should be ready with local partnerships, data residency answers and public-sector references.
Sources: CNBC, The Korea Herald. Written by the xRapid Media LLP team.
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