South Korea plans to triple its investment in artificial intelligence and implement its most significant defence budget hike since 2019 as part of an ambitious spending blueprint, President Lee Jae Myung told lawmakers during his annual budget address on Tuesday.
The 2026 government spending plan lays out KRW 10.1 trillion for AI, a surge that more than triples this year’s allocation. The initiative is designed to move South Korea into the world’s top three AI powers, positioning it alongside the U.S. and China.
In total, the proposed budget stands at KRW 728 trillion, up 8.1% from the current year. The budget proposition is expected to clear the National Assembly, given Lee’s party majority.
A key element of the draft budget is an 8.2% rise in defence expenditure, set to reach KRW 66.3 trillion. If approved, this would mark the largest annual increase in military outlays in six years.
Lee emphasized plans to modernize the nation’s arsenal to better fit new-era warfare shaped by artificial intelligence, aiming to transform South Korea’s military into a smart, elite force.
Of the AI allocation, KRW 2.6 trillion is earmarked for widespread integration of artificial intelligence in society and public services, while 7.5 trillion won will support training and infrastructure development.
South Korea, home to global memory chip leaders Samsung Electronics and SK hynix, plays a pivotal role in the supply of AI-relevant semiconductors and the data center infrastructure underpinning the industry.
Last week, Nvidia CEO Jensen Huang committed to supplying 260,000 of the company’s advanced AI chips to South Korea, commenting that the nation holds the expertise and capacity to realize these ambitions.
