South Korea plans to deploy more than 1 trillion won ($707 million) into a new sovereign wealth fund next year, targeting AI and other strategic technologies as governments worldwide step up investment in the AI race.
Investments in 2027 could range from 600 billion won to more than 1 trillion won, Min Kyung-seol, South Korea’s deputy finance minister for innovation and growth, told Bloomberg Television. The total could increase depending on investment opportunities and their capital requirements.
The fund will target AI as well as robotics, energy, batteries and infrastructure including power grids. Nuclear power, space and quantum technology are also under consideration.
The initiative follows South Korea’s announcement last month that it would inject 20 trillion won into Korea Investment Corp., or KIC, for investments in AI, data centers and infrastructure. The new fund will operate separately from KIC’s traditional management of the country’s foreign-exchange reserves.
Unlike KIC’s existing mandate, which directs capital overseas, the new fund will be able to make long-term direct equity investments in South Korea and abroad.
Min said there are currently no plans for the fund to invest directly in Samsung Electronics or SK Hynix, two South Korean semiconductor companies that have become important suppliers to the global AI industry.
The fund will instead focus in part on companies that have moved beyond the early startup stage and have proven business models, particularly businesses raising Series B or later funding. It could also acquire stakes when earlier investors want to exit, an approach Min called “relay investment.”
Min said sovereign wealth funds and pension investors from the Middle East, Europe and North America have already approached South Korea about possible investments and co-investments.
“We are pursuing the establishment of a sovereign wealth fund that would serve as an anchor investor, helping to attract investment to South Korea and co-invest alongside leading global investors,” Min told Bloomberg.
The strategy comes as sovereign wealth funds increasingly direct capital toward AI infrastructure and related technologies. Abu Dhabi’s Mubadala Investment Co. is considering a $6.3 billion AI data center investment in Japan, while Singapore’s Temasek has explored an investment in Shenzhen Adtek Technology, whose optical connectivity products are used in data centers.