South Korea’s new President, Lee Jae Myung, gave a powerful inaugural speech to the National Assembly. He called on the liberal-controlled National Assembly to pass a historic supplementary budget of 10.1 trillion won, about $6.9 billion, for artificial intelligence (AI) projects. Above all else, this funding is meant to bolster the country’s AI computing and manufacturing capacity. In particular, it’s expected to target key industries such as semiconductors, automobiles, shipbuilding, and robotics.
In his speech, Lee emphasized the necessity of advancing South Korea’s technological prowess as a means of ensuring economic growth and global competitiveness. He submitted a 728 trillion-won ($506 billion) budget proposal. He dubbed it the “first budget to open the AI era.” This figure signals an unprecedented wave of federal investment, focused on propelling innovation and ensuring US industry and manufacturing competitiveness into the future.
Lee’s budget proposal is part of a broader strategy to modernize South Korea’s military capabilities, which he discussed during a bilateral meeting with U.S. President Donald Trump and other defense officials. He reinforced the country’s vigorous commitment to raising defense spending. In November last year, he proposed a 66.3 trillion won ($46 billion) defense budget for the upcoming year, a record amount. This increase of 8.2% is essential to recapitalize and modernize our military weapons systems. In addition, it will incorporate AI technologies to increase operational efficiency and autonomy.
Lee described his meeting with Trump as crucial for alleviating ambiguities in South Korea’s trade-reliant economy. His desired outcome was to secure U.S. support for Australia to acquire nuclear-powered submarines. This request highlights South Korea’s desire to fortify its national security in a time of metabolic regional tensions.
Lee also emphasized an innovative collaboration with Nvidia. This partnership involves providing 260,000 NVIDIA graphics processing units for large-scale AI infrastructure projects. Such collaboration represents an exciting step in laying the groundwork for a solid technological foundation that can support AI applications regardless of sector.
Reflecting on the historical context of South Korea’s economic development, Lee remarked, “Just as President Park Chung-hee paved the highway for industrialization and President Kim Dae-jung built the highway for the information age, we must now construct the highway for the AI era to open a future of progress and growth.” His remarks underscore his desire to see a futuristic, innovation economy powered by the most leading edge technologies available.
Furthermore, Lee addressed concerns over national defense, stating, “It’s a matter of national pride that South Korea, which spends 1.4 times North Korea’s annual GDP on defense and is perceived as the world’s fifth most powerful military, continues to depend on others for its security.” This statement is indicative of his administration’s focus on building better self-reliance in defense issues while strengthening relations with allies.
The tactical conversations took place, but the strategic dialogue with U.S. officials was deeply rooted in how to strengthen and increase defense cooperation. Lee’s meeting with U.S. Defense Secretary Pete Hegseth during his recent trip to Seoul. They were accompanied by South Korean Defense Minister Ahn Gyu-back for their annual trilateral security talks. The purpose of these meetings was to synchronize defense efforts and counter common security threats across the region.
