South Korea bets big on AI, with highest defence spending in six years

Amid the AI boom in the technological sector, South Korea has also joined the AI race, increasing the pace with spending three times on artificial intelligence and making it the biggest defence budget in the past six years,  President Lee Jae Myung said during his  annual parliamentary budget speech on Tuesday.

America being the AI hub, South Korea is also planning to stand stiff among the three AI pillars as Lee said 10.1 trillion won ($7 billion) would go towards “a major transformation aimed at propelling South Korea into the ranks of the world’s top three AI powers” alongside the United States and China.

A new AI era 

Lee said, “We will significantly expand investment to usher in the ‘AI era,” noting that the amount was way more than the earlier budget.  

The proposal was given during the planning of the government budget for 2026.  

Overall, the budget plan totals 728 trillion won, an 8.1 per cent increase from this year.

There is a need for the parliament to pass the proposed budget and receive the utmost majority.  

On the defence budget, the president said his government wants to see an 8.2 per cent increase from this year to 66.3 trillion won.

“We will overhaul conventional weapons systems into state-of-the-art systems suited for the AI era and swiftly transform our military into an elite, smart force,” Lee said.

AI budget 

South Korea is said to be the home of the world’s leading memory chips and next tech hub. The two tech giants manufacture chips essential for AI products and the power-hungry data centres that the fast-evolving industry relies on.

The CEO of US chip titan Nvidia, Jensen Huang announced plans to supply 260,000 of the firm’s most advanced chips to South Korea. After the proposed budget on AI, Huang described his goal as “ambitious.”

(With inputs from AFP)