November 2, 2026, (Inside AI) — South Korean President Lee Jae Myung on Monday asked parliament to approve a record 820.9 trillion won ($615.62 billion) budget for next year, including a 21.3 trillion won ($15.97 billion) allocation for artificial intelligence and related megaprojects. The AI figure is nearly double this year's spending.
Lee made the request in a budget address to the National Assembly in Seoul. The proposal, submitted in September, raises government spending by 12.8%, the largest increase on record. The AI money will go to semiconductors, physical AI and AI data centers, which Lee described as the country's three megaprojects.
The push comes as South Korea's economy rides a chip export boom. The country's exports reached $930 billion from January to October, putting it on track to pass $1 trillion this year. Only the United States, China and Germany have crossed that line. Samsung Electronics and SK Hynix, the memory chip makers, have driven much of the gain.
Lee framed the budget as a chance to spread the benefits of that boom beyond a narrow group.
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"We must make a great transition from 'growth for the few,' in which opportunities and gains are concentrated among certain regions, classes and a small number of companies, to 'growth for all,'" Lee said.
The budget includes a 162.3 trillion won Future Response Fund. It will be financed largely by extra tax revenue from the semiconductor boom. The fund is meant to support growth industries, young people, regional development and education. It also serves as a buffer against future revenue shortfalls.
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The choice of physical AI as a national priority is notable. Most governments funding AI focus on software, large language models or cloud capacity. Physical AI covers robots, autonomous machines and systems that act in the real world. South Korea has a manufacturing base that makes it a natural test bed for factory robots and automated logistics.
The plan also leans on private capital. An 800 trillion won private chip buildout led by Samsung and SK Hynix is planned in the country's southwest. That project sits alongside the government's own spending, creating a combined bet on hardware and the AI systems that run on it.
South Korea's third-quarter growth beat expectations on chip exports and investment. The government now wants to convert that cyclical strength into a longer-term advantage. The budget's success will depend on whether the chip cycle holds and whether parliament approves the full package.
Lee's address also carried a warning. He said the $1 trillion export milestone was within reach but that the gains were not being shared evenly. That tension sits at the center of the budget debate. The same chip exports that fund the Future Response Fund have concentrated wealth in a few companies and regions.
Inside AI could not independently verify the export figures or the budget breakdown. The numbers come from the government's budget proposal and trade data cited in the address.
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The budget now goes to the National Assembly, where Lee's party and opposition lawmakers will negotiate the final figure. The 12.8% increase is already the largest on record, and any cuts would hit the AI allocation directly.
South Korea is not alone in raising state spending on AI. The European Union, Japan and China have all announced multi-billion-dollar programs this year. What sets Seoul apart is the scale relative to its economy and the tight link between public money and private chip manufacturing.
The $15.97 billion AI figure is small next to the $615.62 billion total budget, about 2.6%. But it is nearly double last year's commitment, and it arrives as the country nears a symbolic export threshold. The vote in parliament will show whether Lee can turn a chip windfall into a broader growth strategy.
