ED AI dividend is policy gamble

Kim Yong-beom, presidential chief of staff for policy, speaks during a news conference at Cheong Wa Dae in Seoul, April 28. Yonhap

A senior presidential official drew criticism for floating a populist policy idea of redistributing increased tax revenue to address the widening wealth gap in the age of artificial intelligence (AI).

In a social media post on Monday, Kim Yong-beom, presidential chief of staff for policy, proposed what he called a “national dividend,” a concept involving direct cash payments to citizens funded by increased tax revenue from the booming AI industry.

Shortly after media outlets reported on the post on Tuesday, the stock market experienced volatility. Korea’s benchmark KOSPI plunged as much as 5.1 percent before recovering a significant portion of its losses.

Cheong Wa Dae later said the AI dividend proposal reflected Kim’s personal opinion, apparently seeking to downplay its significance. It added that the proposal had neither been reviewed internally nor discussed as a possible social policy.

Nevertheless, Kim’s policy trial balloon caused a stir. Critics argued that his idea of distributing funds generated from the booming semiconductor industry resembled the rationing systems of communist countries.

Rep. Jang Dong-hyeok, chairman of the main opposition People Power Party, said Kim’s proposal appeared rooted in socialist thinking. “He’s basically saying the government will take money from profitable businesses and redistribute it to citizens. This is what communists do,” Jang wrote on social media.

Kim later claimed his remarks had been taken out of context. He said he was not advocating a windfall tax, adding that he had merely suggested direct cash payments because tax revenue was expected to surge amid the semiconductor boom.

Semiconductors have become the defining product of the AI era. Demand for high-bandwidth memory and advanced chips has soared, driven by heavy investment in AI infrastructure and fueling a semiconductor supercycle. Experts expect the boom to continue for the foreseeable future.

Kim called for a comprehensive spending plan, saying the government should prepare in advance for how to use the expected increase in tax revenue.

To some extent, the stock market overreacted, albeit briefly, as his proposal was interpreted as a signal of possible government intervention in the AI industry to secure funding for social policy. In a capitalist economy, such market reactions are natural. Markets respond not only to what senior officials or regulators say, but also to how their remarks could affect the broader economy.

As a senior policymaker at the presidential office, Kim should have understood that every word he says carries weight. Like other high-ranking officials, he is expected to exercise extreme caution when discussing policy matters. Regrettably, Kim appeared not to recognize the implications of his remarks.

His proposal itself is also problematic. Kim argued that citizens deserve to share in the benefits of the AI boom because they helped build the nation’s semiconductor infrastructure. He described the semiconductor supercycle as the result of decades of national investment and effort.

However, he failed to clearly explain the rationale behind citizens’ entitlement to direct financial rewards from the industry’s success. As a result, he has become vulnerable to criticism that he is pursuing a short-sighted and irresponsible populist agenda aimed at influencing the June 3 local elections in favor of the ruling Democratic Party of Korea.

It is fair to say that Korea’s globally competitive semiconductor industry stems primarily from the long-term vision and bold investments of business leaders who spent decades building robust infrastructure despite considerable risks. They deserve much of the credit for creating today’s booming AI industry.

Kim’s assertion that citizens deserve financial rewards from the semiconductor boom is, therefore, misleading, if not fundamentally flawed. As a senior government official, he is not in a position to make such claims. Corporate profits are generated through companies’ successful investments and business decisions; they are corporate assets. If anyone is in a position to advocate direct cash payments to citizens, it is corporate leaders themselves. This is why some Big Tech executives in the United States have publicly supported universal basic income as a possible response to widening inequality in the AI era.

It is also questionable whether one-time cash payments, such as a dividend, would be an effective way of redistributing wealth. Such payments are temporary and unlikely to provide a sustainable solution to inequality driven by the concentration of wealth among AI asset owners, technology executives and highly skilled workers.

Calls for a stronger social safety net are growing as AI-driven job displacement gradually becomes a reality. Kim acknowledged the need for AI-era social policies in his social media post. However, his proposal falls short of offering a durable solution. A one-time dividend is radical, short-sighted and, above all, experimental.