Government Ramps Up Artificial Intelligence Policy Initiatives
South Korea’s government has announced that
artificial intelligence (AI) investment will become its highest policy priority, unveiling a sweeping set of initiatives intended to revitalize economic growth amid adverse trade conditions and demographic headwinds[2]. The new measures were disclosed as part of President Lee Jae Myung’s administration’s inaugural bi-annual economic policy plan and come as the country’s economic growth forecast has been trimmed due to external pressures, such as increased U.S. tariffs[2].
Ambitious Goals and Major Policy Packages
From the latter half of 2025, South Korea will introduce comprehensive policy packages that include:
- Major investments for thirty flagship AI and innovation projects.
- Development of AI for various sectors, including robots, cars, ships, home appliances, drones, factories, chips, and cultural exports like K-beauty and K-food.
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Establishment of a ₩100 trillion (approx. $71.56 billion) fund in collaboration with private industry to invest in strategic technology sectors[2][3].
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Extensive support for LLMs and sovereign AI models, potentially partnering with local tech giants for open-source foundational model development[3].
Strategic Investment Breakdown
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AI-powered factories: US$45.5 million[1]
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AI chip development: US$15.7 million[1]
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Self-driving vehicle technologies: US$87.6 million[1]
- Additional allocations for biotechnology, robotics, and advanced display technologies[1]
Long-Term Vision: Global AI Leadership
The government’s plans are designed to cement South Korea as one of the world’s top three AI powers while offsetting the impact of the country’s record-low birth rate and structural economic challenges[2]. The Ministry of Finance emphasized, “A grand transformation into AI is the only way out of growth declines resulting from a population shock”[2].
Additional measures include:
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Tax incentives and regulatory reforms to accelerate investment.
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Creation of a centralized AI governance structure, with an AI Future Planning Chief at the Presidential Office to coordinate national policy[3].
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Fast-tracking the construction of AI-specific data centers and advancement in domestic neural processing chips — leveraging South Korea’s leadership in semiconductors[3].
Tax incentives and regulatory reforms to accelerate investment.
Tax incentives and regulatory reforms to accelerate investment.
