South Korea’s Ambitious Plan to Invest in Artificial Intelligence

Recently, President Yoon Suk Yeol announced South Korea’s plan to invest nearly $7 billion in artificial intelligence by 2027. The country, known for being home to Samsung and SK Hynix, the top two memory chip makers in the world, is determined to become a global leader in cutting-edge semiconductors. The decision to focus on AI chips comes as no surprise, considering the crucial role that the semiconductor industry plays in South Korea’s export-driven economy.

The semiconductor industry, often referred to as the lifeblood of the global economy, has seen a surge in demand for advanced chips necessary to power AI systems. This increase in demand can be attributed to the success of products like ChatGPT, which rely on generative AI. South Korea’s move to invest in AI chips is not only motivated by economic factors but also by geopolitical concerns, particularly related to Taiwan and the US-China rivalry.

Currently, the AI chip market is dominated by Nvidia, a Silicon Valley giant that receives HBM chips from SK Hynix. As South Korea aims to become a world leader in AI technology, the competition intensifies. Yoon emphasized the importance of investing in this sector, highlighting it as an “industrial war” and an “all-out war between nations.” The pressure to keep up with global competitors is evident, especially with the US providing substantial subsidies to companies like TSMC in an effort to encourage domestic chip production.

To support the growth of innovative AI semiconductor companies, South Korea plans to establish a separate fund of 1.4 trillion won ($1 billion). The government’s commitment to investing in AI technology is not only a strategic move but also an economic one. The semiconductor industry is a significant contributor to South Korea’s economy, accounting for a fifth of the country’s total exports in March alone.

South Korea’s ambitious plan to invest in artificial intelligence showcases its determination to lead in AI chips and go beyond traditional memory chips. As the global competition in the semiconductor industry intensifies, South Korea’s strategic investments will play a crucial role in shaping the future of AI technology. With government support and collaboration with industry leaders, South Korea is poised to make significant advancements in this critical sector.