# South Korea's President Asks Parliament for 21.3 Trillion Won for AI and Chips in 2027, Nearly Double This Year

Times of AI Desk · 2026-11-02 · Policy

[https://timesof.ai/2026/11/korea-2027-budget-21-3-trillion-won-ai-chips-physical-ai](https://timesof.ai/2026/11/korea-2027-budget-21-3-trillion-won-ai-chips-physical-ai)

> President Lee Jae Myung told the National Assembly on November 2 that the 2027 budget puts 21.3 trillion won (about $16 billion) into AI and three megaprojects: chip manufacturing, physical AI and AI data centres. That is nearly double this year's level. About 4.7 trillion won would go to building a top-tier Korean frontier model. The record 820.9 trillion won budget still needs parliamentary approval.

South Korea is making AI the centrepiece of the biggest budget in its history, and the money is aimed at hardware and industrial use as much as at models. In his budget speech to the National Assembly on **Monday, November 2**, President **Lee Jae Myung** said the 2027 budget would put **21.3 trillion won** (about **$16 billion**, per AFP) into AI and what the government calls its three megaprojects: semiconductor manufacturing, physical AI and AI data centres. Lee said that is "nearly double this year's level," according to Seoul Economic Daily.

## Where the AI money goes

Seoul Economic Daily reported these lines from the speech:

- **2 trillion won** to expand chip production, including early operation of fabs in the greater Seoul area and a cluster in the southwest, through a new special account for the semiconductor industry.
- **2.1 trillion won** for power, water and industrial-site infrastructure, so that companies do not miss investment windows.
- **500 billion won** for field trials of physical AI in eight sectors, including manufacturing, smart factories and defence.
- **4.7 trillion won** for frontier AI development, with the goal of bringing Korean models into the global top tier.

The speech also includes "AI for All" programmes, such as public AI agents that guide people from information about a public service through to applying for it. The government plans to train 2,000 chip-design specialists and expand AI education for students, job seekers and workers.

Lee said the military would become a "smart, elite force" built on integrated manned and unmanned systems using AI, robots and drones, AFP reported. The defence budget would rise about 8% to 73.3 trillion won.

## The size of the budget

Yonhap reported that total proposed spending is **820.9 trillion won** (about $614.5 billion), a 12.8% increase that Lee called the largest on record. The government submitted the bill in September. The budget also creates a Future Fund of about 160 trillion won for growth industries, young people and regional development.

The frontier-model money follows the state-backed [frontier AI project we reported in October](https://timesof.ai/2026/10/korea-frontier-ai-project-4-7t-won), which The Korea Times then reported as a 4.7 trillion won earmark for 2027.

## Limits

- This is a budget proposal. The National Assembly still has to pass it. AFP says passage is likely given Lee's party's majority.
- Reports differ on the frontier AI figure: Seoul Economic Daily and AFP give 4.7 trillion won, while Yonhap gives 4.6 trillion won. We have not seen the speech transcript or the budget documents.
- The 21.3 trillion won headline combines chips, infrastructure and AI. The speech coverage we read does not break down how much goes to AI software alone.
- The dollar conversion is AFP's, at the exchange rate on the day.

## Sources

- [Yonhap: Lee vows bold investment in AI, future growth engines for 'growth for all' (November 2, 2026)](https://en.yna.co.kr/view/AEN20261102000952315)
- [Seoul Economic Daily: Korea to Spend 21.3 Trillion Won on AI in 2027 Budget (November 2, 2026)](https://en.sedaily.com/politics/2026/11/02/korea-to-invest-213-trillion-won-in-ai-under-2027-budget)
- [The Straits Times (AFP): South Korea to double spending on AI and chips in 2027 (November 2, 2026)](https://www.straitstimes.com/asia/east-asia/south-korea-to-double-spending-on-ai-and-chips-in-2027)