South Korea bets on AI to revive growth amid trade pressure
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South Korea pledged to prioritize AI investments as economic growth dwindled due to U.S. tariff-related trade headwinds. Under President Lee Myung’s administration, the country’s Finance Ministry promised to unveil H2 2025 AI policy packages for 30 projects as part of the bi-annual policy plan. The Ministry pointed out that a massive transformation into AI was the only way to boost the country’s declining economy. The plan includes AI technologies for cars, drones, robots, home appliances, chips, ships, and factories. K-food and K-beauty are among the cultural products and advanced materials that will be integrated with AI tech. The Ministry also mentioned its plans to include tax incentives, financial investments, and regulatory refinements in the packages. The South Korean government announced it had set aside $71.56B (100T Won) for investments in strategic sectors. Cryptopolitan also reported on August 8 that the SK government planned to spend $383M on a national AI foundation model to challenge the U.S. and China. In February, the country boasted plans to build the biggest data center by 2028 for $35B, nearly three times OpenAI’s spending on their Stargate project. South Korea estimates less than 1% growth by the late 2040s The government of South Korea said its AI policy plans aimed to propel the country to the world’s top three AI powers, and potentially boost growth despite recording the lowest birthrate. It estimated a potential growth rate of 2%, but projected that it could fall below 1% by the late 2040s. However, the government hopes its new AI policies will help raise the growth rate by up to 3%. Government data shows that the country’s economy grew fastest in over a year in Q2 due to rebounding consumer demand and strong technology exports. The Ministry of Finance expects a 0.9% economic growth rate this year for…
