Seoul seeks record $614.5B budget with focus on AI

The South Korean government on Monday sought parliamentary approval for a record $614.5 billion budget for 2027, prioritizing investments in artificial intelligence, semiconductors, and other emerging technologies to boost economic growth, Yonhap News Agency reported.

Addressing parliament, President Lee Jae Myung said the proposed spending, up 12.8% from this year, would strengthen South Korea's technological competitiveness and ensure broader economic benefits.

The government plans to allocate approximately $16 billion to AI, semiconductor manufacturing, data centers, and related projects.

A proposed $121.5 billion Future Response Fund will support young people, emerging industries, and regional development.

Lee also proposed an 8.2% increase in defense spending to approximately $54.9 billion, seeking greater military self-reliance and an early transfer of wartime operational control from the US.

He said South Korea would acquire nuclear-powered submarines and KF-21 fighter jets while developing AI-powered military systems, according to The Korea Herald.

South Korea's economy, estimated at around $2.25 trillion in 2026, is projected by the Bank of Korea to grow 3.3% this year and 2.9% in 2027, driven largely by semiconductor exports.

Opposition People Power Party lawmakers protested the spending proposals, raising concerns over national debt.

Lee urged lawmakers to approve the budget by the Dec. 2 statutory deadline.