South Korean President Lee Jae Myung proposed a record 820.9 trillion won ($615.62 billion) budget for 2027, up 12.8% from the previous year, centered on technology-led growth.

The spending plan is part of Lee’s “growth for all” agenda, designed to spread the gains from technological progress beyond a handful of large companies and regions.

At its core is 21.3 trillion won ($15.97 billion) for AI and three major priorities—semiconductors, physical AI and AI data centers—up 97.2% from this year’s 10.8 trillion won.

That includes 4.7 trillion won for frontier AI development, 500 billion won for physical-AI demonstrations across eight sectors, including manufacturing and defense, and plans to develop public AI agents.

For semiconductors, the plan includes a dedicated competitiveness account, 2 trillion won to expand production capacity and advance fabrication plants and a southwestern cluster, and 2.1 trillion won for power, water and industrial-complex infrastructure.

The public investment would complement about 800 trillion won in private-sector semiconductor manufacturing commitments led by Samsung Electronics and SK Hynix.

The proposal also sets aside 13.8 trillion won for the NEXT 10 strategic technology fields and lifts research and development funding for future technologies, including the seven SEED areas, by 4 trillion won to a record 39.5 trillion won.

To build the workforce behind that push, the government plans to train 2,000 specialists in chip design and regional semiconductor industries and expand AI education for students, job seekers and employed workers.

Beyond technology, the culture budget would provide 11.6 trillion won for artists in basic arts, the content industry’s global competitiveness and development of five major tourism zones.

Energy-transition plans include 2.8 trillion won for renewable energy and expanding purchase subsidies to cover 430,000 electric vehicles.

Defense spending would increase 8.2% to 73.3 trillion won, with funding for AI-driven modernization of the armed forces.

A new 162.3 trillion won Future Response Fund, financed largely by higher semiconductor tax revenue, is intended to support growth industries, youth and regional development, education and fiscal safeguards.