TLDR: The South Korean government has announced a record 35.3 trillion won ($25.3 billion) allocation for national R&D in 2026, marking a 19.3% increase. Artificial intelligence will receive the steepest funding boost, more than doubling its budget to 2.3 trillion won, targeting advanced projects like AGI and lightweight AI models. This significant investment, the first under President Lee Jae Myung’s administration, aims to restore the research ecosystem and secure future technologies, positioning AI as a top national growth driver.
The South Korean government has unveiled a monumental plan to allocate a record 35.3 trillion won, equivalent to approximately $25.3 billion, to its national research and development (R&D) budget for the year 2026. This represents a substantial 19.3 percent increase from the current year’s spending and marks the largest allocation in the nation’s history. This ambitious proposal is the first of its kind under the administration of President Lee Jae Myung, signaling a renewed commitment to scientific and technological advancement.
The Ministry of Science and ICT officially confirmed the plan during a full session of the Presidential Advisory Council on Science & Technology on Friday, August 22, 2025. A cornerstone of this increased funding is artificial intelligence (AI), which is set to receive the steepest funding boost. The government plans to more than double its budget for AI, escalating from 1.1 trillion won this year to an impressive 2.3 trillion won in 2026. This significant investment will primarily target advanced AI projects, including the development of artificial general intelligence (AGI) and the creation of lightweight, low-power AI models.
Beyond AI, the R&D budget also prioritizes other national strategic technologies, such as quantum computing and synthetic biology, which will see a 29.9 percent increase, reaching 8.5 trillion won. Furthermore, critical sectors like energy, defense, and small and venture businesses are slated for considerable expansions in their budgets, with increases of 19.1 percent, 25.3 percent, and 39.3 percent, respectively.
This substantial increase in R&D funding comes after a period of significant budget cuts by the former administration, which saw spending trimmed by nearly 10 percent in a single year, causing considerable disruption within the science community. Minister of Science and ICT Baek Kyung-hoon emphasized the administration’s vision, stating, “This R&D budget is not just about restoring the ecosystem but about achieving full recovery and real growth. We will work with the science and technology community to establish a sustainable research system that is stable and predictable.” The proposal underscores a dual focus on securing future technologies and revitalizing the research ecosystem.
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In a broader context, the government has declared AI as the top national growth driver for the next five years, aiming to reverse slowing growth attributed to demographic challenges. The economic strategy, announced at a joint meeting of the growth strategy task force and economic ministers, outlines a vision for South Korea to become one of the world’s top three AI powers, aspiring to lift the nation’s potential growth rate to 3 percent and elevate its national strength into the global top five. This includes selecting 15 major projects to lead the AI transition, with seven specifically targeting manufacturing strengths such as robotics, automobiles, shipbuilding, home appliances, drones, factories, and semiconductors, with the ambitious goal of becoming a global leader in ‘physical AI.’ Initiatives include developing general-purpose humanoid robots for various industries and on-device AI chips crucial for autonomous vehicles and smart appliances. To foster a robust talent pipeline, the government also plans to reform education and workforce systems under an initiative dubbed ‘AI as the Korean alphabet,’ designed to empower all Koreans with AI literacy and skills.
