South Korea Plans 4.7 Trillion Won for a Homegrown Frontier AI Model

South Korea’s Ministry of Science and ICT plans to invest 4.7 trillion won ($3.49 billion) in developing a domestic AI model intended to compete with global frontier models. Officials described the plan on September 8, 2026, while cautioning that its exact design had yet to be decided. 26

How the investment would be funded

The ministry plans to form an independent fund for the project. The 4.7 trillion won would be part of, not additional to, the ministry’s proposed 9.4 trillion-won AI budget in its 2027 budget request. That makes the planned frontier-model investment equal to half of the proposed AI allocation. Neither the fund nor the project’s spending should be treated as finalized on the strength of the September 8 announcement. 26 Reporting on the broader budget proposal also identifies 9.4 trillion won for AI. 17

The ministry did not specify which project decisions remained open. A September 9 report described a possible financing route through a Future Response Fund and plans to select multiple developers by year-end. Those later-reported details offer a potential direction, not a settled account of how the September 8 proposal would be implemented. 2618

Why South Korea wants a frontier model

The proposal reflects a push to develop advanced AI domestically rather than rely solely on models built abroad. Science Minister and Deputy Prime Minister Bae Kyung-hoon has argued for large-scale investment as the AI landscape becomes more closed, while discussing South Korea’s position between U.S. and Chinese technologies. 42 The scale of the global race is substantial: The Wall Street Journal reported annual data-center capital expenditure of roughly $800 billion. 1

For now, the clearest distinction is between ambition and execution. South Korea has identified a funding target and a goal of building a globally competitive model; officials had not yet settled the project details as of September 8. 26