South Korea plans record 820.9 trillion won budget with 21.3 trillion won for AI

South Korea's government wants to spend 820.9 trillion won next year, a 12.8 per cent increase that President Lee Jae Myung told the National Assembly on Monday would be the country's largest-ever fiscal investment and its fastest annual spending growth on record.

Speaking in support of the 2027 budget bill submitted in September, Lee said the government would "boldly invest in AI and future growth engines" to lift the economy's growth potential, and called for bipartisan backing. The plan rests on a 160 trillion-won Future Fund, which the president described as a strategic investment platform to support younger generations, growth industries and regional development, and on what he called "growth for all".

Technology spending sits at the centre of the proposal. Lee said 21.3 trillion won would go to three megaprojects: a semiconductor manufacturing hub and data centres, physical AI, and AI promotion. A further 4.6 trillion won is earmarked for acquiring a sovereign AI model with the world's highest performance, and 13.8 trillion won for securing competitiveness in 10 strategic technology sectors.

The spending plans assume higher tax revenue driven by the semiconductor boom, the president said, and he argued the larger budget reflects both higher living standards and the need to strengthen the country's future capabilities. The bill now depends on the National Assembly, where Lee is seeking cross-party support for its passage.