# South Korea sets aside 4.7 trillion won for sovereign AI

> President Lee Jae Myung’s 2027 budget includes nearly twice as much for AI-related industries as the 2026 level, plus funding for a domestic AI model.

Oossa · 2026-11-02 · https://oossa.com/en/south-korea-sets-aside-4-7-trillion-won-for-sovereign-ai

South Korean President Lee Jae Myung has proposed a record 820.9 trillion won ($610.14 billion) budget for 2027, including 21.3 trillion won for semiconductors, physical AI and AI data centers. CNBC reports that this allocation is nearly double the 2026 level.

The plan also sets aside 4.7 trillion won to develop a sovereign AI model. Lee said the goal was to build a model with the “world’s highest performance.” The budget announcement does not identify a developer, say when the model would be ready, or explain who would be able to use it.

Lee presented the spending plan to the National Assembly on Monday, saying the country would “boldly invest in AI and future growth engines.” The budget also includes increased defense spending and social security spending for young people.

## Where the money is going

The 21.3 trillion won allocation covers several areas rather than AI models alone: semiconductors, physical AI and data centers. The government plans to train 2,000 specialists to lead semiconductor design and the regional semiconductor industry, and to expand AI education for students, job seekers and people already in work. The announcement does not give a timetable or eligibility rules for those education programs.

The wider budget would grow 12.8% from the previous year. Lee said it would produce “virtually no net increase in government debt,” because newly issued bonds would be used to repay existing debt. That is the president’s description of the financing plan; the announcement does not provide further debt calculations.

## A push tied to exports

South Korea’s economic growth has been driven largely by semiconductor exports as demand for computing power has risen. The Korea Customs Service reported that exports reached a record $115.3 billion in October, up 93.7% from a year earlier. Shipments totaled $930 billion in the first 10 months of 2026, passing $900 billion for the first time.

The government is also building links between education and employers. South Korean universities have company-linked “contract departments,” where firms help shape courses, provide financial support and recruit qualifying graduates. Samsung Electronics and SK Hynix are among the companies cited as offering pathways to jobs through these programs. Lee’s budget proposal adds specialist training and broader AI education to that workforce effort.

## The facts

- South Korea’s proposed 2027 budget totals 820.9 trillion won, a 12.8% increase.
- The budget allocates 21.3 trillion won to semiconductors, physical AI and AI data centers, nearly double the 2026 level.
- A separate 4.7 trillion won is earmarked for developing a sovereign AI model.
- South Korea’s exports reached $115.3 billion in October, up 93.7% year over year, according to the Korea Customs Service.

## Why it matters

For South Korean students, job seekers and workers, the proposed expansion of AI education could create more training opportunities, although the government has not yet specified who qualifies or when programs will begin. The budget confirms a large public investment in domestic AI and semiconductor capacity, but it does not yet show what the planned model will do or who will get access.

## Sources & references

1. [South Korea targets 'world's highest performance' sovereign AI model in record new budget](https://www.cnbc.com/2026/11/02/south-korea-ai-spending-budget.html) – CNBC, 2026-11-02

Last updated: 2026-11-02