▲AI PRISM* Customized Economic Briefing
*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "AI-based customized news recommendation and summarization service" developed with support from the Korea Press Foundation. It selects and provides six customized news articles by reader type.
[Key Issue Briefing]
■ Won Reversal to Strength: The won-dollar exchange rate dropped to the 1,410 won range during intraday trading, hitting its lowest level since early October last year. Amid a combination of nego (dollar-selling) volume from exporters and dollar inflows related to American Depositary Receipts (ADRs), an unusual trend emerged in which even the typical won-weakening factors of a KOSPI plunge and large-scale net selling by foreigners were offset.
■ Google AI Talent Exodus: Google's AI organization is being shaken as the replacement of DeepMind's chief executive officer (CEO) coincides with the joint departure of key developers from its early founding days. With the decision-making structure split between London and Mountain View cited as the cause of its competitive disadvantage, the move is being interpreted as a centralized restructuring around headquarters.
■ PEF Reverse Discrimination Controversy: While the National Assembly's private equity fund (PEF) regulatory legislation is concentrated solely on domestic managers, foreign capital is expanding its acquisition battles for Korea's advanced industries outside the supervisory net. Concerns are growing both inside and outside the capital markets that future growth-engine assets, such as artificial intelligence (AI), bio, and renewable energy, could be handed over to foreign capital.
[Global Investor News of Interest]
1. Won Strengthens Despite 4.6% Stock Plunge as Exchange Rate Drops to 1,410 Won Range
- Key Summary: The won-dollar exchange rate fell to as low as 1,414.5 won during intraday trading on the 6th, recording its lowest level in about 10 months since October 2 last year (1,399.5 won), and closed at 1,423.8 won, down 0.7 won from the previous trading day. Amid the recent downward trend in the exchange rate, an increase in nego volume from exporters, along with dollar inflows related to SK hynix's ADR listing, supported the won's strength. In addition, the easing of geopolitical tensions in the Middle East stabilized international oil prices, and the yen strengthened amid wariness over foreign exchange market cooperation between the U.S. and Japan, which also led to downward pressure on the dollar. On this day, the KOSPI plunged 4.58% due to large-scale net selling by foreigners, and a sell-side sidecar was even triggered. Foreigners net sold 3.3273 trillion won worth of domestic stocks, but analysts say new dollar-weakening material is needed for a further decline.
2. Even the 'Legend' Departs…Google, Losing Ground in AI, Builds Mountain View One Team
- Key Summary: Google CEO Sundar Pichai announced on the 5th that DeepMind CEO Demis Hassabis will step down to become chairman of DeepMind and chief scientist at Alphabet. Jeff Dean, Alphabet's chief scientist who led the architecture and engineering implementation of Gemini during his 27 years at Google, left the company along with colleagues including Sanjay Ghemawat, Oriol Vinyals, and Quoc Le. The DeepMind CEO position will be filled by former chief technology officer (CTO) Koray Kavukcuoglu with the title of senior vice president, in a system change that has him reporting directly to CEO Pichai. Meanwhile, with Google having decided to invest $205 billion in AI this year, it has yet to release Gemini 3.5 Pro, which it had signaled for a June unveiling this year, making it difficult to avoid short-term performance pressure.
3. [Exclusive] 11 PEF Regulation Bills in One Year…Only Foreign Firms Smile
- Key Summary: As amendments to the Capital Markets Act regulating private equity funds (PEF, funds that pool money from a small number of investors to invest in corporate management rights) have been proposed one after another in the National Assembly, criticism of reverse discrimination has been raised, with regulations applying only to domestic managers. A total of 11 amendments to improve the institutional-only PEF system have been proposed since July 2025, including not only borrowing limit regulations and strengthened reporting obligations to financial authorities, but also disclosure of manager compensation and prior notification to worker representatives when acquiring management rights. In contrast, the latest Asia buyout funds of the top seven global managers primarily active in Korea (Blackstone, KKR, Carlyle, TPG, EQT, Bain Capital, and CVC) total 100 trillion won, but they raise most of their funds overseas and are therefore exempt from direct regulation under domestic law. A senior industry official warns that regulations that only tighten the grip on domestic managers will increase the incentive to relocate business bases overseas, adversely affecting the capital markets.
[Global Investor Reference News]
- Key Summary: The targets of foreign PEF managers' acquisitions of Korean companies are broadening from manufacturing and distribution in the past to future growth engines such as AI, mobility, renewable energy, bio-healthcare, and K-beauty. According to the Seoul Economic Daily's Signal League Table and industry tallies, the share of transactions accounted for by foreign capital in Korea's mergers and acquisitions (M&A) market of 500 billion won or more exceeded 70% last year, and the industry estimates that share has risen further this year. Earlier this year, France's Air Liquide acquired DIG Airgas for 4.85 trillion won, and EQT Partners acquired Douzone Bizon (012510) for a total of 3.2 trillion won, while KKR's acquisition of the SK Group renewable energy business and Bain Capital's acquisition of ECOMarketing (230360) were also completed. Unlike the European Union (EU), which applies equal supervision to foreign managers through the Alternative Investment Fund Managers Directive (AIFMD), Korea has no effective means, and observers point out that the reverse discrimination structure is bound to deepen.
- Key Summary: Minister of Trade, Industry and Energy Kim Jung-kwan criticized the argument to socially distribute the profits of semiconductor companies as an act of cutting open the belly of the goose that lays golden eggs, at the Kwanhun Debate held at the Press Center in Jung-gu, Seoul, on the 6th. Citing the situation in which China's Changxin Memory Technologies (CXMT) is continuing investment that exceeds its revenue, Minister Kim warned that sharing the money earned could result in losing the semiconductor market in one to two years. In addition, regarding easing the 52-hour workweek regulation for research and development personnel, he repeatedly emphasized the need for institutional improvement, saying that news of China's localization of lithography equipment was a major shock, revealing a difference of opinion with Minister of Employment and Labor Kim Young-hoon. Regarding Korea-U.S. trade issues, he explained that overproduction tariffs under Section 301 of the U.S. Trade Act will be announced within this month, and that the U.S. position is to keep the total tariffs on Korea from exceeding 15%.
6. Last-Minute Negotiations on Reopening Hormuz…"Iran Demands Up to 7% Fee"
- Key Summary: Iran and Oman are finalizing a draft of a 60-day interim agreement to reopen the Strait of Hormuz, the Wall Street Journal (WSJ) reported on the 5th. The draft has ships entering the Persian Gulf use routes near Iran and ships exiting use routes near Oman's coast, and the collection of tolls or fees was left out. However, a senior Iranian official said Iran wants a fee of 5% to 7% of cargo value on passing ships, Oman is discussing around 3%, and the U.S. is demanding free passage. Meanwhile, Iran's Deputy Foreign Minister Kazem Gharibabadi drew a line, saying it does not mean full reopening unless conditions such as the U.S. lifting its maritime blockade are met, giving rise to counterarguments that a final settlement is difficult to be optimistic about.
▶Go to article: Won Strengthens Despite 4.6% Stock Plunge as Exchange Rate Drops to 1,410 Won Range
▶Go to article: Rights Offerings Become a De Facto 'Permit System'…Autonomous Fundraising Function Paralyzed
▶Go to article: 11 PEF Regulation Bills in One Year…Only Foreign Firms Smile
