A record-breaking fiscal bill for the country is betting on AI and semiconductors. On November 2, South Korean President Lee Jae-myung unveiled the 2027 budget proposal at the National Assembly: total spending is up 12.8% from the previous year to 820.9 trillion won (about 4.09 trillion yuan), a historic high. Of that, 21.3 trillion won (about 106.1 billion yuan) is aimed at semiconductors, physical AI, and AI data centers—nearly double the amount for 2026—plus 4.7 trillion won (about 23.4 billion yuan) dedicated to self-developed large models, with the goal of "world-leading performance."

Behind the spending spree is anxiety about talent

Where the money flows, people must be trained to fill the gap. The government plans to cultivate 2,000 professionals capable of "leading semiconductor design and local industries," and expand AI education to students, job seekers, and current workers. The accompanying approach is "made-to-order" majors at universities: companies take part in curriculum design and provide funding, and students can get a chance to join giants such as Samsung Electronics and SK Hynix before graduation. Binding industry and academia together to lock in labor supply early is South Korea's backup move for the AI arms race.

A balancing act: strong exports without rising debt

The confidence for such big spending comes from the trade ledger. Customs data show South Korea's exports in October surged 93.7% year on year to a historic peak of $115.3 billion (about 768 billion yuan); in the first ten months, total exports topped $900 billion for the first time, with a monthly trade surplus of $42.5 billion. Lee Jae-myung seized the moment to call for annual exports to hit $1 trillion, and stressed building a smart military with "manned-unmanned teaming" based on semiconductors, robots, and drones. The defense budget also rose 8.2% to 73.3 trillion won. More importantly, he promised that after the spending increase, the government's net debt would stay basically flat, and new bonds would only be used to replace existing old debt—during a window when the IMF forecasts South Korea's economic growth at 3.3% in 2026, this money must both spur growth and avoid crushing the public finances.