November 5, 2025
soul – President Lee Jae-myung on Tuesday outlined a 728 trillion won ($506 billion) budget plan for 2026, calling it “South Korea’s first budget to usher in the AI era” and pledging wide-ranging investments to make the country a world leader in artificial intelligence.
Speaking at the National Assembly in Seoul, Lee said the government will allocate 10.1 trillion won, triple this year’s amount, to accelerate the transition to an AI-driven economy.
“In the industrial age, a day’s delay means a month’s delay; in the information age, it means a year’s delay. But in the AI age, a day’s delay means a generation’s delay,” Lee said, adding that the transition to an AI-based society is “inevitable for the survival of the nation.”
He criticized the previous government for “wasting precious time on research and development and even cutting spending” and said the country must now catch up.
“We started late so we have to move faster than ever to catch up to the leaders if we have a chance,” he said.
Lee compared the effort to the nation’s huge development drives led by past presidents. He said the late military strongman Park Chung-hee, who ruled the country from 1963 to 1979, built an industrialization highway that drove South Korea’s manufacturing boom, while the late civilian leader Kim Dae-jung, who served from 1998 to 2003, expanded a nationwide digital network that laid out an information highway.
“Now we must build the expressway of the AI era to open a new future of growth,” said Lee.
The fiscal year 2026 budget will increase by 8.1% from this year and will be the first full-year budget under the Lee administration, which was inaugurated on June 4. Of this amount, 2.6 trillion won will be allocated to the introduction of AI across industry, daily life, and public sectors, and 7.5 trillion won will be allocated to support human resource development and infrastructure construction.
Lee said the government will purchase an additional 15,000 high-performance graphics processing units, a key component that will determine competitiveness in the AI era, for a total of 35,000 units earlier than planned. “Nvidia plans to supply 260,000 such processors to South Korea, so private companies will have no difficulty in obtaining them,” he added.
Lee also pledged to increase defense spending by 8.2% to 66.3 trillion won, and said the government would foster the defense industry as a key growth sector in the AI era.
“Through research and development investment and the discovery of emerging companies with advanced technology, we will develop the defense sector into a major manufacturing industry and lay the foundations for our country to become one of the world’s top four defense exporters,” he said.
He stated that this issue is a matter of national pride and emphasized the need for an independent defense force. He added: “South Korea spends 1.4 times the annual gross domestic product of North Korea on national defense and ranks as the world’s fifth-largest military power, but it remains dependent on external forces for its security.”
In Lee’s speech, he also detailed the expansion of welfare measures, including raising the median income standard by 6.51%, the highest ever, to ensure that a four-person household receives at least 2 million won a month in basic living support. The age eligible for child benefits will be extended from 7 to 8 years old, and the number of jobs under the elderly employment program will be expanded from 1.1 million to 1.15 million.
“It is a fundamental duty of the state to protect vulnerable populations who are most affected by technological change,” Lee said. “AI will reshape society, and governments need to ensure that no one is left behind by that change.”
Li’s speech also included a briefing on the results of last week’s Asia-Pacific Economic Cooperation meeting, and highlighted bilateral talks with US President Donald Trump and Chinese President Xi Jinping. Mr. Lee said that as a result of this meeting, tariff negotiations with the United States were concluded, and talks with the United States government regarding South Korea’s nuclear submarine construction program made progress.
However, the main opposition party, the People’s Power Party, which was protesting against the special prosecutor’s request for the detention of Rep. Choo Kyung-ho the day before, boycotted the meeting.
Choo served as party floor representative until December 2024, immediately after then-President Yun Seok-yeo declared martial law on December 3.
Rep. Moon Daelim, a spokesperson for the Democratic Party, criticized the opposition party’s boycott as a “dereliction of duty.”
President Moon said, “Last year, President Yoon refused to give a budget speech, and this year, the People’s Power Party boycotted the budget speech.This absurd relay of boycotts is nothing but a political show.”
He was referring to the 2024 budget speech, which Yun did not attend. The former president cited political deadlock in parliament as the reason for forcing the prime minister to present the plan to the prime minister.
