With the ambition to be in the top 3 leading AI powers, South Korea has poured more than 151 billion USD in investment.

South Korean President Lee Jae Myung has announced a plan to spend 210 trillion won ($151.11 billion) on a five-year agenda, including a technology-industry initiative package aimed at placing South Korea among the world's top three powers in artificial intelligence (AI).

South Korea has ambitions to soon become one of the world's top three AI powers. (Source: Soompi)

However, the feasibility of raising capital to realize this ambition is controversial.

The program includes the “AI energy highway” project, which aims to secure more than 50,000 graphics processing units (GPUs), build advanced data and energy infrastructure, develop next-generation AI technology, and train human resources, according to the State Planning Commission. The government plans to allocate 25 trillion won for AI projects out of a total budget of 210 trillion won.

The government has said it will raise 116 trillion won from spending cuts and 94 trillion won from increased revenue, but experts say this will be difficult to achieve without tax adjustments, especially given the country's already massive budget deficit.

South Korea's public debt has increased by 120 trillion won, surpassing the 1,300 trillion won mark by 2024, while the budget deficit is at 4.2% of GDP, the highest among the Organization for Economic Cooperation and Development (OECD) group of countries for six consecutive years.

Some fear that AI funding could be squeezed as priorities shift to other public policies such as safety, demographics and regional growth.

There is also speculation that the government could look to Korea Electric Power Corporation (KEPCO) to help offset the shortfall by raising electricity prices for the first time in two years. KEPCO reported an operating profit of 5.89 trillion won in the first half of 2025, but still faces a cumulative deficit of nearly 29 trillion won since 2021.

If electricity prices are not increased, KEPCO will have to issue more bonds, which are already close to the ceiling according to regulations. However, when consumer inflation has maintained a 2% increase for two consecutive months, increasing electricity prices is considered a politically and socially sensitive choice.

Source: https://baoquocte.vn/tham-vong-lot-top-3-cuong-quoc-hang-dau-ve-ai-han-quoc-manh-tay-rot-hon-151-ty-usd-dau-tu-324732.html