South Korea to pour billions into AI

South Korea will aim to invest nearly $16 billion on artificial intelligence and semiconductors, Lee Jae Myung said in his annual budget address to parliament.

"We will invest 21.3 trillion won (€14.3 billion, $15.97 billion), nearly twice ​this year's amount, in AI and the three megaprojects of semiconductors, physical ​AI and ‌AI data centres," Lee said on Monday.

He added that 4.7 trillion won will be invested to bolster "frontier AI development projects, with the aim of achieving world-leading performance for our own AI model, a national strategic asset."

The Lee administration has unveiled a record budget proposal for next year, featuring a 12.8% increase in government spending to 820.9 trillion won (€551.5 billion, $615.62 billion).

The proposal needs parliamentary approval, and Lee's party, the Democratic Party of Korea (DPK), currently holds the majority.

South Korea is Asia's fourth-largest economy and home to two of the world's biggest memory chip makers — Samsung Electronics and SK Hynix.

The AI boom has sent demand for memory chips soaring.

South Korea recorded faster-than-expected economic growth in the third quarter, driven by chip exports and investment.

Exports totalled $930 billion from January to October and are on track to surpass $1 trillion this year, making South Korea the fourth country to achieve the milestone after the United States, China and Germany.