President unveils record annual budget, emphasizes AI as national priority

President Lee Jae Myung delivers a policy speech on the government’s budget proposal for next year at the plenary session of the National Assembly in Seoul, Tuesday. Yonhap

President Lee Jae Myung on Tuesday called on the National Assembly to approve next year’s budget, unveiling a record 728 trillion won ($525 billion) spending plan — an 8.1 percent increase from this year — amid what he described as sweeping changes in global trade and the rapid rise of artificial intelligence (AI). The proposal represents the Lee administration’s first full-year budget and the largest in Korea’s history.

Delivering a policy address at the Assembly, Lee underscored that the 2026 budget will prioritize the AI industry. He announced that 10.1 trillion won will be allocated to accelerate Korea’s leap toward becoming one of the world’s top three AI powers, more than tripling this year’s AI-related budget of 3.3 trillion won.

“This is a strategic investment that balances future growth with fiscal sustainability in the age of artificial intelligence. I ask for the National Assembly’s active cooperation,” Lee said.

Of the 10.1 trillion won, the president said 2.6 trillion won will be invested in integrating AI across industries, daily life and public services, while the remaining 7.5 trillion won will go toward workforce training and AI infrastructure development.

The government also plans to invest about 6 trillion won over the next five years to accelerate AI-driven transformation in core industries, including robotics, cars, shipbuilding, home appliances, semiconductors and manufacturing.

President Lee Jae Myung delivers a policy speech on the government’s budget proposal for next year at the plenary session of the National Assembly in Seoul, Tuesday. Joint Press Corps

The president also revealed that funding for research and development in advanced strategic sectors, including AI, content creation and defense industries, will be expanded by 19.3 percent to a record 35.3 trillion won. He pledged to create a 150 trillion won National Growth Fund over the next five years to nurture high-tech industries and ensure that the benefits of economic growth are broadly shared.

On defense, Lee said next year’s military budget will rise by 8.2 percent to 66.3 trillion won. He vowed to modernize conventional weapons systems with cutting-edge AI-driven capabilities and swiftly transform the military into a “smart elite force” to strengthen a self-reliant national defense.

“We will foster the defense industry as a leading manufacturing sector in the AI era by discovering startups with advanced technologies and expanding R&D investment, laying the foundation for Korea to become one of the world’s top four defense exporters,” he said.

While lawmakers from the ruling Democratic Party of Korea listen to President Lee Jae Myung’s policy speech on the government's budget proposal for next year, the seats of the main opposition People Power Party remain empty due to their walkout at the National Assembly in Seoul, Tuesday. Yonhap

Lee also stressed the government’s responsibility to protect the most vulnerable segments of society from the disruptive effects of rapid technological change, pledging targeted, age-specific support programs to address demographic shifts.

“Just as we succeeded in industrialization and informatization, we will open the door to the AI era together with the great people of Korea,” Lee said, calling for bipartisan cooperation to pass the budget within the legal deadline.

Meanwhile, the main opposition People Power Party (PPP) boycotted Lee’s policy speech, holding a protest at the National Assembly on Tuesday. The PPP convened an emergency meeting at the Assembly to denounce a decision by a special prosecutor to request an arrest warrant for former floor leader Choo Kyung-ho.

The special prosecutor requested the arrest of Choo for allegedly obstructing a parliamentary vote to end martial law last December, accusing him of aiding and abetting the insurrection.

PPP floor leader Song Eon-seog accused the administration of “destroying the judiciary and moving toward one-party dictatorship to erase the opposition and halt the president’s own trial,” vowing to “fight by all means necessary against the reckless Lee regime.”