South korea unveils record 2027 budget, heavily backing AI and semiconductor growth

President Lee Jae-myung presented South Korea's 2027 fiscal plan to the National Assembly, detailing a historic budget of 820.9 trillion won, marking a 12.8% increase over the prior year. A significant portion of this spending, 21.3 trillion won, is earmarked for semiconductors, physical AI, and AI data centers—nearly double the 2026 allocation—alongside 4.7 trillion won for developing proprietary large language models aiming for world-leading performance. To support this technological push, the government plans to train 2,000 specialists in semiconductor design and local industries while expanding AI education across various demographics. This initiative includes partnerships where corporations contribute to university curriculum design, allowing students to intern at firms like Samsung Electronics and SK Hynix before graduation. The funding is supported by robust trade performance, as October exports reached a peak of $115.3 billion year-over-year. Lee Jae-myung called for annual exports to reach $1 trillion and emphasized developing a smart military utilizing unmanned-manned teaming. Despite the increased spending, he assured that the government's net debt would remain stable, with new borrowing intended only to replace existing debt, even as the IMF projects 3.3% economic growth for 2026.