South Korea will double spending on artificial intelligence and semiconductors in 2027 to a record high of $16 billion, President Lee Jae Myung said Monday in his annual budget speech to parliament.
The country is a tech powerhouse home to Samsung Electronics and SK hynix, two of the world's three biggest makers of memory chips -- computer components in huge demand thanks to the AI boom.
"We will allocate 21.3 trillion won ($16 billion) to semiconductors, physical AI and AI data centres, the 'three mega-projects', as well as investment in artificial intelligence, nearly double this year's amount," Lee said.
"We will make bold investments in AI and future growth engines to boost our economy's growth potential, which is the foundation of its economic strength," said Lee.
He added that the government will invest 4.7 trillion won to support "frontier AI development projects, with the aim of achieving world-leading performance for our own AI model, a national strategic asset."
The proposal was made in a speech outlining his government's spending plans for 2027.
Overall, the budget plan totals 821 trillion won, a 12.8 percent increase from this year, making it the largest budget proposal on record.
Lee now needs parliament to pass the budget proposal, which is likely given his party's majority.
On the defence budget, the president said his government wants to see an 8.2 percent increase from this year to 73.3 trillion won.
The government will aim to secure nuclear-powered submarines and KF-21 fighter jets, and "rapidly transform our military into a smart, elite force by establishing integrated manned and unmanned systems based on AI, robots and drones," said Lee.