South Korea Announces 1,500 Trillion Won AI Investment Plan Focusing on Semiconductors, Data Centers, and Physical AI
The South Korean government unveiled a 1,500 trillion won public-private investment plan targeting semiconductors, AI data centers, and physical AI to bridge the gap with the US and China.
Lee Jin-soo, Director-General for AI Policy Planning at the Ministry of Science and ICT (MSIT), outlined South Korea's strategy to become a global "Top 3" AI power during a speech at the "K-Open Source AX" event in Seoul on October 28. Facing overwhelming computational advantages held by the United States and China, the government identified three key areas for narrowing the gap: expanding computing infrastructure, strengthening competitiveness of proprietary AI models, and resolving disparities in AI adoption.
To achieve these goals, the government plans to drive a total of 1,500 trillion won in public-private investments across three "Mega Projects": semiconductors, AI Data Centers (AIDC), and Physical AI. According to details from a July announcement, over 800 trillion won will be allocated to semiconductors, approximately 550 trillion won to domestic and international AIDC construction, and 20 trillion won specifically to R&D and industrialization of Physical AI. Lee described the synergy using an analogy: semiconductors are the brain, data centers are the heart, and Physical AI is the body, together forming future growth engines.
Beyond hardware, South Korea emphasizes building "full-stack" capabilities. Citing NVIDIA CEO Jensen Huang's "Five-Layer Cake" theory (energy, semiconductors, infrastructure, models, applications), Lee noted that South Korea is one of the few nations possessing indigenous technology and companies at every layer. However, he acknowledged that the top-layer AI application market remains in its early stages. Consequently, the government aims to promote personal AI agents through the "AI for All" project and deepen vertical-specific model applications in sectors like law, chemistry, and manufacturing to reduce reliance on foreign services.