Government Sets Record 39.5 Trillion Won for R&D, Boosts AI Budget by 70% to 4.1 Trillion Won [2027 Budget Plan]

Next year’s government budget for Research and Development (R&D) has been set at a record 39.5 trillion won. In particular, the budget for Artificial Intelligence (AI) R&D will rise by about 70% from this year to 4.1 trillion won, with a focus on securing future strategic technologies such as physical AI and AI data centers (AIDC). The government plans to invest more than 200 trillion won in R&D over the five years from this year through 2030 to speed up technology-driven growth, including the development of world-leading AI models and the first commercial Small Modular Reactor (SMR).
According to the 2027 budget plan approved by the government at a State Council of South Korea meeting on the 1st, next year’s government R&D budget will total 39.5 trillion won, up 11.2% from this year. Of that amount, major R&D spending allocated and coordinated by the Office of Science, Technology and Innovation under the Ministry of Science and ICT will reach 33.8 trillion won, an increase of 11.5%, or 3.5 trillion won, from this year.
The growth rate of the government’s R&D budget will remain in double digits next year, following this year’s 19.9% increase. That is well above the 7.2% average annual growth rate of the government R&D budget over the past 20 years.
The government will first invest a record 3.3 trillion won in new projects. It also plans to sharply shorten the review period for large R&D projects with total costs of at least 100 billion won, from about two years under the preliminary feasibility study process to just three months, so that necessary technologies can be funded on time.
Investment in the 10 NEXT strategic technologies, including AI, semiconductors and displays, advanced robots and mobility, next-generation batteries, future energy and atomic energy, Advanced Biotechnology, Aerospace and Ocean, and quantum, will rise from 11 trillion won this year to 13.8 trillion won next year. Of that, 5.8 trillion won will go to three major mega-projects in semiconductors, physical AI and AIDC, while 3.7 trillion won will be concentrated on seven SEED areas, including SMR, renewable energy, nuclear fusion, quantum, Aerospace, Advanced Biotechnology and advanced supply chains.
In particular, AI R&D will receive 4.1 trillion won, up 1.7 trillion won, or about 70%, from this year. By 2030, the government aims to make Korea the world leader in physical AI by developing world models for large-scale synthetic data generation and robot foundation models for general-purpose use.
It will also invest 1.3 trillion won in semiconductors and displays, 280 billion won in next-generation energy, and 2.2 trillion won in Advanced Biotechnology. The government will also introduce investment-type R&D, which follows a cycle of investment, recovery and reinvestment, and allocate 3.6 trillion won to basic research. It plans to provide 4.8 trillion won to government-funded research institutes in the science and technology sector, strengthening stable personnel cost support as the Project-Based System (PBS) is phased out.
Through these measures, the government plans to invest more than 200 trillion won in government R&D for the first time over the five years from this year through 2030. Its goals include developing world-leading AI models, securing top-tier physical AI capabilities, maintaining the world’s No. 1 position in semiconductor manufacturing, and building the first commercial SMR by 2035.
[email protected] Yeon Ji-an Reporter