South Korea plans $10.3B push for physical AI

South Korea plans to provide about 16 trillion won, or $10.3 billion, in policy financing this year to speed adoption of physical AI across artificial intelligence, robotics, future vehicles, defense, semiconductors and secondary batteries. The Financial Services Commission and the Ministry of Trade, Industry and Resources announced the effort at Korea Development Bank headquarters in Seoul.

The program is part of the National Growth Fund-M.AX Frontier Project, with M.AX standing for Manufacturing AI Transformation. The industry ministry will support technology development and AI adoption by manufacturers, while the financial commission will use the National Growth Fund to back large investments, business expansion, research, testing, commercialization and scale-up.

The first project will support LS Cable & System’s expansion of extra-high-voltage subsea cable production facilities and testing infrastructure in Donghae, about 110 miles east of Seoul. The company plans to invest 160 billion won, or about $103 million, while the National Growth Fund approved an 80 billion won, or about $51.5 million, low-interest loan with a 10-year term.

Officials said South Korea can draw on its manufacturing base, production expertise, industrial data and supply chains as AI moves into factories, logistics centers and transportation systems. Participating companies include LS Cable & System, CJ Logistics, Doosan Robotics, Hyundai Mobis, LX Semicon and Magnachip Semiconductor.