S. Korea launches W150tr plan to gain edge in AI tech

South Korea on Wednesday unveiled plans to bet big on the growth of artificial intelligence, semiconductors, biotechnology, defense, robots and green mobility to up the ante in the global race for strategic technologies.

Under the plan, a massive investment fund worth 150 trillion won ($108 billion) will be pooled over the next five years, and the plan will create up to 125 trillion won worth of added value in South Korea's economy, according to the government.

Amid a slowdown in Korea's economic growth due to heated international competition for technologies, President Lee Jae Myung stressed the need to secure a new engine for growth.

"Major countries like the United States and China are ramping up their state support to strategic industries backed by cutting-edge technologies," Lee said at the event he hosted in Seoul before some 150 participants on Wednesday. "We are engaged in a war without gun smoke."

Lee also said the scale of the pooled fund was later confirmed to be 1.5 times larger than the initially set 100 trillion won, according to the policy blueprint suggested by the de facto transition team for Lee, the State Affairs Planning Committee.

Half of the pooled fund will stem from a 75 trillion won fund newly established by the state-run policy lender Korea Development Bank. The government projected KDB's fund to launch in December following the promulgation of relevant legislation on Tuesday. KDB will join forces with government ministries to explore investment destinations.

The rest of the fund will comprise contributions from South Korean pension funds and financial institutions, as well as individual citizens.

The fund will invest in securities of late-stage venture firms with technology prowess, investment vehicles that invest in such securities, low-interest loans, as well as large-scale infrastructure such as AI expressways and data centers, according to the government.

The destinations for investment will be businesses related to artificial intelligence, semiconductor chips, biotechnology, vaccines, defense equipment, robots, hydrogen energy, secondary batteries, display panels and futuristic mobility, according to the government.

The investment fund will also open the way for South Korea's "grand transition to productive finance," Lee said.

"We will take advantage of the growth opportunity and share its fruits with citizens," Lee said, adding that the newly established fund could alleviate the chronic overheating of the housing market and banks’ reliance on lending rates.

Meanwhile, Lee is set to hold a news conference Thursday at 10 a.m. Marking his 100th day in office, the conference will be the second of its kind since his inauguration in June.

Some 150 journalists from Korea and abroad will take part in the conference, which will center on economics, social affairs and culture, said Lee Kyu-youn, senior presidential secretary for public relations and communication, in a briefing Wednesday.