Acting president vows to support homegrown AI companies, braces for China's DeepSeek shockwaves

South Korea’s Acting President Choi Sang-mok speaks during a meeting on enhancing Korea’s economy and industrial competitiveness Wednesday at the Sejong Complex in Gyeonggi Province. (Joint Press Corps.)
South Korea’s Acting President Choi Sang-mok speaks during a meeting on enhancing Korea’s economy and industrial competitiveness Wednesday at the Sejong Complex in Gyeonggi Province. (Joint Press Corps.)

South Korea’s Acting President Choi Sang-mok vowed to create a government fund of over 34 trillion won ($23.5 billion) to support the nation’s advanced industries -- battery and biotechnology –- amid concerns over the second Trump administration’s "America First" policies.

“The government is committed to wholeheartedly and swiftly boosting support for high-tech industries,” said Choi, who also doubles as the Finance Minister, during a meeting on enhancing Korea’s economy and industrial competitiveness on Wednesday at the Sejong Complex in Gyeonggi Province.

“(The government) will set up a ‘High-Tech Strategic Industry Fund,’ which will be more than double the size of the existing 17 trillion won semiconductor financial support program and offer various support measures, including low-interest loans and equity investments.” The funding will also provide extensive support for small and medium-sized enterprises involved in advanced industry materials, parts and equipment, according to Choi.

Next month, the government is set to discuss a legislative amendment detailing plans for the new fund with the National Assembly.

Commenting on how the Chinese artificial intelligence startup DeepSeek has recently rattled the tech world, Choi also stressed the importance of securing competitiveness in AI. “The global race for AI dominance may expand into a multifaceted competition that includes software capabilities. … We will accelerate the launch of the national AI computing center and convene a meeting of the AI committee this month to discuss specific strategies for becoming one of the top three AI leaders in the world.”

Choi reiterated that strengthening industrial competitiveness can only succeed with the cooperation of the National Assembly, urging the prompt passage of the Semiconductor Special Act and power and energy legislation.

The government's large-scale funding follows a meeting Tuesday convened by the Acting President to devise countermeasures against the tariff war initiated by Trump, during which he pledged to minimize the negative impact on the national economy.

“While the (US) tariff hike on Mexico and Canada has been postponed for a month, ongoing (turmoil over) tariffs and disruptions in the international community may deepen the uncertainty on our exports and the overall economy. We cannot rule out the possibility of the US expanding its tariff measures in the future,” noted Choi.

Although Korea has not yet been the target of Trump’s tariff threat, sources indicate it could be only a matter of time due to the nation’s decadeslong dependence on exports to the US. According to the US Census Bureau, Korea’s trade surplus with the US as of November 2024 was $60.2 billion, surpassing Canada’s $54.8 billion and making it the eighth-largest trade deficit country from the US standpoint.

Around 224 Korean companies operating in Mexico and Canada are expected to take a hit if the US resumes its trade war, regardless of whether the US raises tariffs on Korean goods. The additional costs for seven major companies, including Samsung Electronics, LG Electronics, Kia and Posco, from the trade measures are estimated to total $1.8 billion, the Industry Ministry noted.

Meanwhile, a trilateral AI alliance across Korea, the US and Japan is taking shape against DeepSeek following a meeting Tuesday attended by Samsung Electronics Chairman Lee Jae-yong, OpenAI CEO Sam Altman and SoftBank Group CEO Masayoshi Son. Sources say key discussions likely centered on Samsung’s possible involvement in the $500-billion Stargate project, a joint venture of OpenAI and SoftBank, aimed at establishing physical and virtual infrastructure for next-generation AI research and development.