South Korea bets $880bn to win the AI era

South Korea has placed its biggest bet yet on the AI era. The plan commits at least $880bn over a decade to chips, data centres and robots. It is the boldest South Korea AI investment to date, and the government says speed is now the only way to survive.

President Lee Jae Myung unveiled the package on Monday in Seoul, flanked by the heads of Samsung and SK Hynix. He called the two business leaders “national heroes” and framed the spending as a matter of survival. Bloomberg put the total at 1,350 trillion won, or about $880bn.

Lee branded the effort the “Three Mega Projects”. The three pillars are semiconductors, AI data centres and physical AI. He called them the “triple axis for a great leap forward”. “Speed is the only way to survive,” he said.

Samsung and SK Hynix will spend 800 trillion won, around $518bn, on memory chips. Each firm will build two fabs in the south-west, Yonhap reported. The Gwangju and Jeolla area becomes the country’s second chip cluster, alongside the Seoul hub. It is the first real break from the capital region in years.

Industry Minister Kim Jung-kwan said the old model had run out of room. “Relying on a single production base in the Seoul metropolitan area is no longer sufficient,” he said, citing limits on power and water. The government will pull the new fabs forward by up to 12 years, from the late 2040s to the mid-2030s. It will fast-track permits and build out power and water supply.

Seoul wants more than new ground, though. It also aims to double memory output near the capital within five years, and add 30 trillion won over 15 years for the whole chip value chain. Samsung will base its advanced packaging in the central region, where it makes the high-bandwidth memory that AI servers depend on.

The map splits the work by region. The Chungcheong region becomes a packaging hub, with 81 trillion won for advanced lines. Daegu and North Gyeongsang will focus on materials, parts and equipment. Lee framed the spread as a way to end years of growth clustered around Seoul.

The second pillar targets compute. SK Group, GS Group and internet leader Naver will invest 550 trillion won in AI data centres. They aim to build 8.4 gigawatts by 2029, then add 10 more by 2035. Science Minister Bae Kyung-hoon called the next three years the “golden time” to lead physical AI, and said Seoul would name it a national strategic industry.

Once the grid is ready, the science ministry wants to build a general-purpose “world model” for physical AI, a system that grasps how the real world behaves. SK chairman Chey Tae-won went further on his own