South Korea targets 'world's highest performance' sovereign AI model in record new budget

South Korea unveiled a record 2027 budget of 820.9 trillion won, a 12.8% increase, with 21.3 trillion won earmarked for semiconductors, physical AI and AI data centers as the government aims to build a "world's highest performance" sovereign AI model. The spending plan underscores Seoul's push to secure domestic AI and chip capabilities amid intensifying global competition for compute infrastructure and foundational models. The allocation signals continued state support for the semiconductor sector, a cornerstone of Korea's export-driven economy, and could benefit domestic players across the chip and data center value chain. Officials did not detail how the 21.3 trillion won will be distributed among the three priority areas. Watch for follow-up guidance on fund allocation, procurement timelines and which companies or consortia are selected to develop the sovereign AI model.