South Korea has set its 2027 research and development budget at 39.5 trillion won ($28.6 billion) to secure an early lead in artificial intelligence and other advanced technologies. Over the five years starting this year, cumulative government R&D spending is targeted to exceed 200 trillion won for the first time. The plan reflects a push to secure world-first and world-best technologies as China's rise intensifies in industries that have long anchored the Korean economy.
The Ministry of Science and ICT (MSIT) said on the 1st that the government's R&D budget for 2027 has been set at 39.5 trillion won. The figure is up 11.2% from this year, extending double-digit growth after this year's 19.9% increase, which restored R&D funding that had been sharply cut under the Yoon Suk-yeol administration.
The most striking feature of next year's budget is the increase tied to AI data centers and physical AI, seen as core pillars of three mega-projects. The AI R&D budget will rise 69.1% to 4.1 trillion won next year from 2.4 trillion won this year. The government will launch large-scale R&D to develop AI data centers (AIDC) as a national strategic industry. It will also concentrate resources on full-stack physical AI technology development, aiming to become the leading country in physical AI by 2030.
The budget for advanced robotics and mobility will expand 46.9% over the same period to 1.1 trillion won from 700 billion won. The increase is expected to support the development of core robotics and mobility technologies that enable physical AI, along with efforts to localize component production. Funding for future energy and nuclear power, needed for AI infrastructure, also rose 37.7% to 1.7 trillion won from 1.2 trillion won.
The government is also overhauling procedures to speed up technology development and draw investment in a timely manner. For large-scale R&D projects with total costs of 100 billion won or more, the preliminary feasibility review period will be cut to three months from about two years. At a briefing the previous day, MSIT said, "We expect that shortening the feasibility review period will allow faster development of emerging technologies such as physical AI."
Medium- to long-term R&D funding will also expand sharply. MSIT finalized the Second Medium- to Long-Term Investment Strategy for National R&D after approval at the ninth deliberation meeting of the Presidential Advisory Council on Science and Technology the previous day. The strategy centers on channeling more than 200 trillion won into government R&D over the five years from this year through 2030. It marks the first time a five-year medium- to long-term plan has put national R&D investment above 200 trillion won.
The move follows concerns that China has begun to overtake Korea in technology levels in key industries, while the gap with leading countries is widening in future technologies. The government set out goals including developing world-class AI models, securing the world's best physical AI capabilities, firmly maintaining the top global position in semiconductor manufacturing, and successfully building the country's first commercial small modular reactor (SMR) by 2035.
MSIT also signaled a firm commitment in its own budget to making Korea a leading AI nation. The ministry's budget proposal for next year totals 29.6 trillion won, up 24.5% from this year. Of that, AI spending rose 84.3% to 9.4 trillion won from 5.1 trillion won.
In particular, MSIT allocated 3.85 trillion won to acquire 10,000 units of Vera Rubin, the latest graphics processing units (GPUs), to enable the development of frontier-class AI models. It will also accelerate the commercialization of physical AI, using the infrastructure of the Korea Post to run demonstrations of domestically developed physical AI in public logistics.
MSIT said, "Next year's budget proposal is effectively the first in which the current administration has led the entire budgeting process, putting its policy results into full effect." It added, "Drawing on fiscal room secured through intensive spending restructuring, the ministry has drawn up its largest-ever AI and science and technology budget to strengthen the country's future potential."
