South Korea is investing billions into LLM ventures to drive innovation, population growth and strategic partnerships to place it among the top three countries leading in AI-assisted technology ventures.
South Korea President Lee Jae-myung has launched an aggressive drive to propel South Korean companies onto the global stage, prioritizing tech innovation and international competitiveness.
According to recent reports, the new administration is committed to transforming South Korea into a top-tier economic powerhouse through massive investments in cutting-edge sectors, with artificial intelligence and cultural exports at the forefront.
A cornerstone of this vision is the “AI G3” initiative, which aims to position South Korea as one of the top three global AI powers.
This commitment is backed by substantial financial pledges, including a staggering KRW 100 trillion (approximately USD 73.8 billion) public-private investment fund and an additional KRW 1.8 trillion (approximately USD 1.3 billion) supplementary budget specifically for AI capabilities.
These funds will be channelled towards enhancing AI infrastructure, fostering talent, boosting research and development, and improving data ecosystems.
Key initiatives under this plan include large-scale AI investment for infrastructure and chips, targeting the acquisition of over 50,000 GPU units (including 10,000 high-end GPUs in 2025) and the rollout of AI-specific Data Centres (AIDCs) with regulatory support.
The administration also prioritizes the development of domestic Neural Processing Units (NPUs), leveraging South Korea’s strengths in chipmaking.
A significant project, the “World Best LLM Project,” aims to support the creation of an open-source foundational large language model, potentially involving major local firms like Naver and LG, underscoring ambitions for full-stack AI capabilities and technological sovereignty.
To bolster the talent pipeline, initiatives such as the “AI Pathfinder Project” will attract international researchers, alongside support for postdoctoral researchers and workforce training.
Beyond AI, the government is offering tax incentives and targeted R&D for key sectors like defence and strategic tech, while food tech and green bio innovations aim to transform agriculture. It plans to boost cultural exports to KRW 50 trillion by 2030, leveraging K-content, fashion, and cosmetics.
President Lee has pledged to cut unnecessary regulations, support Korean conglomerates, tackle household debt, and aid small businesses.
This tech push builds on South Korea’s legacy of strategic government investment, which transformed the country from a poor nation in the 1960s to a global economic leader, with a longstanding focus on heavy industries and ICT.
Even before Lee’s administration, South Korea consistently prioritized technological advancement and global competitiveness.
In March 2025, a KRW 50 trillion ($34.4 billion) fund was established to support advanced industries such as semiconductors, rechargeable batteries, bio, and AI through cheap loans and investments over five years.
This initiative also included policies to attract skilled foreign talent by offering “top-tier” visas and permanent residency.
The government had already designated 12 industries as national strategic technologies, providing targeted financial support and protection.
For instance, in 2025, South Korea planned to allocate KRW 8.8 trillion ($6.45 billion) in low-interest loans and support for the semiconductor sector. Furthermore, President Yoon Suk Yeol’s administration in April 2024 announced an initiative to invest KRW 9.4 trillion ($6.94 billion) in AI by 2027, specifically targeting research and development in AI chips and next-generation high-bandwidth memory chips.
The Ministry of Science and ICT also allocated $585 million in domestic AI R&D in 2024. Programs like the “Super Gap Startup 1000+ Project,” launched in May 2023, aimed to select and fund promising deep-tech startups with unrivalled technologies.
South Korea also boasts an advanced ICT infrastructure, with high broadband internet penetration and some of the fastest average mobile and fixed broadband speeds globally.
It was the first country to launch commercial 5G services in 2019. These foundational elements, coupled with continuous heavy investment in R&D, have made South Korea a leading exporter of ICT products and a major innovator globally.
The intensified focus on global expansion, technological innovation, and competitiveness under President Lee’s administration is driven by several critical factors. Some experts suggest that the rapidly realigning global order, rising regional tensions, and fragmented supply chains require a proactive strategy.
South Korea aims to maintain its competitiveness in strategic sectors such as semiconductors and artificial intelligence, recognizing these as crucial to national economic security. Securing supply chains and reducing dependence on external factors have become top priorities.
Secondly, the country faces significant demographic challenges, including a declining population and an aging society, which are expected to lead to a shrinking labour force.
To address this, AI integration is seen as a vital solution that could substantially boost GDP growth and total factor productivity. Nationwide AI education and training initiatives are essential to overcoming workforce shortages and driving technological adaptation across industries.
Thirdly, despite its impressive economic growth to date, South Korea acknowledges the need for continuous innovation to sustain future development.
The government aims to capitalize on its manufacturing and hardware strengths while fostering disruptive innovation through startups, balancing the influence of large conglomerates with emerging businesses.
Additionally, President Lee’s administration claims its pursuing a pragmatic foreign policy, seeking to diversify partnerships beyond traditional alliances to enhance economic security and reform export strategies.
This approach may leverage Korea’s comparative advantages in industry and innovation to bolster its leadership in AI standards, critical minerals, and digital infrastructure, especially in the Global South.
President Lee assumed office with a clear post-crisis mandate to rebuild the nation after recent political upheaval, creating momentum for aggressive economic stimulus measures and deep structural reforms.
