South Korean President Lee Jae-myung placed artificial intelligence at the core of his government’s economic vision during his first budget speech, pledging massive AI investments and policy support to transform the nation’s key industries, public services, and even defense systems. The goal is to integrate AI across all sectors.
Shortly before his speech, major South Korean conglomerates like Samsung and Hyundai Motor announced plans to collaborate with NVIDIA to build "AI factories" capable of handling massive domestic AI training and inference workloads. These projects will involve large-scale purchases of NVIDIA’s AI GPU computing clusters.
The flurry of AI-related developments has led stock traders to interpret South Korea’s moves as a national push into AI, driving shares of memory chip giants SK Hynix and Samsung, along with other AI computing leaders, to record highs. The KOSPI index surged over 20% in October alone, marking its best monthly performance since 2001.
Delivering his first budget address since taking office in June, Lee described the 2026 budget as "the nation’s first AI-era budget," signaling a policy shift toward technological transformation following months of political turmoil under his predecessor.
"In the AI era, falling behind by even a day means lagging by an entire generation," Lee told lawmakers. "Since we started late, we must move faster and do more to catch up—only then will we have a chance."
He announced plans to triple AI investments next year to over 10.1 trillion won (~$70 billion), part of a 728 trillion won budget aimed at revitalizing economic growth, countering demographic decline, and preparing for global trade and technological disruptions.
Lee emphasized AI’s role in shaping future competitiveness in robotics, autonomous vehicles, semiconductors, and logistics. He vowed to combine South Korea’s manufacturing prowess with real-time data to develop "physical AI" capabilities, while expanding AI adoption in biotech, healthcare, education, and taxation.
Long-term plans include upgrading national computing infrastructure, expanding AI talent pipelines, accelerating procurement of high-performance GPUs, and enhancing AI education.
On national security, the government proposed an 8.2% defense budget increase to 66.3 trillion won, prioritizing conventional weapons upgrades and AI-powered military systems—raising defense spending to 2.4% of GDP. Lee called autonomous defense a matter of national pride.
Despite opposition skepticism, Lee urged bipartisan cooperation, framing 2026 as a historic turning point. The speech was boycotted by the main opposition party over an arrest warrant for a former finance minister.
**Samsung, SK, Hyundai to Build AI Factories**
Wall Street analysts are particularly excited about NVIDIA CEO Jensen Huang’s projection of $500 billion in data center revenue visibility from 2025–2026, driven by Blackwell and next-gen Rubin AI GPU architectures. This could propel NVIDIA’s market cap past $5 trillion, making it the first company to reach that milestone.
Huang, often called the "Godfather of AI," believes the "AI era" has fully arrived, with NVIDIA transitioning from a chip designer to a comprehensive AI infrastructure provider—spanning silicon, computing clusters, and industry ecosystems.
During Huang’s visit to South Korea on October 31, NVIDIA announced partnerships with Samsung, SK Group, and Hyundai to accelerate AI factory development. Under the agreements, NVIDIA will supply over 260,000 high-performance AI GPUs to support South Korea’s AI infrastructure push.
- **Samsung**: The collaboration will establish next-gen AI factories merging smart computing and chip manufacturing. Samsung’s facility will deploy 50,000+ NVIDIA GPUs, with discussions underway to supply next-gen HBM4 memory chips. - **SK Group**: Joint AI factories will focus on semiconductor R&D, cloud infrastructure, digital twins, and AI agents, featuring 50,000+ NVIDIA accelerators. Phase one targets completion by late 2027. - **Hyundai**: The partnership will leverage Blackwell-based AI factories to advance autonomous driving, smart factories, and robotics, deploying 50,000 GPUs for integrated AI model training and deployment.
NVIDIA highlighted its 25-year alliance with Samsung, from early DRAM collaborations to HBM3E and HBM4 supply deals, as foundational to today’s AI revolution.