South Korean President Lee Jae Myung presented a record budget of 820.9 trillion won, or $615.62 billion, to the National Assembly, representing a 12.8% increase from the previous year. The artificial intelligence allocation totals 21.3 trillion won, including $15.97 billion, nearly twice the 10.8 trillion won earmarked this year, and will fund semiconductors, physical AI and data centers. Military spending will rise by 8.2% to 73.3 trillion won, while a new 162.3 trillion won future response fund will be financed largely by increased semiconductor tax revenue. The plan is backed by approximately 800 trillion won in private semiconductor commitments led by Samsung Electronics and SK Hynix and could, according to Citi, improve the prospects for an upgrade to South Korea’s sovereign credit rating. The budget now faces parliamentary review, with approval expected by December 2, 2026.
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