Korea Bets the Nation on AI

In 1980, Brazil’s GDP per capita was slightly above that of South Korea. Fast forward and the picture has completely reversed. Today, South Korea’s GDP per capita is more than three times Brazil’s.

South Korea’s rise was built around its chaebols — family-controlled industrial groups such as Samsung, SK, Hyundai, and LG — which became national champions in semiconductors, automobiles, electronics, shipbuilding, batteries, and other industries.

The chaebols are impressive companies, but their rise was not a clean free-market story. It mixed entrepreneurship, exports, discipline, and global competition with heavy state direction and privileged access to capital — a classic case of crony capitalism, the kind of arrangement we Austrians naturally despise.

But Korea’s case has an important distinction: the ultimate judge was the global market. Exports imposed a brutal discipline on the chaebols. The Korean government could direct credit and support favored companies, but it could not force Americans or Europeans consumers to buy Korean cars, ships, or semiconductors.

Ultimately, global markets — not the Korean government — determined who succeeded.

Against this backdrop of economic success, South Korea unveiled three ambitious AI mega-projects this week.

First, chips. Samsung plans to invest approximately $1.6T in domestic semiconductor fabs through 2040, while SK announced an additional $713B.

Second, AI infrastructure. SK, GS, and Naver will build 8.4 gigawatts of AI data center capacity by 2028, with cumulative investment expected to exceed $650B by 2035.

Third, Physical AI. The government aims to make South Korea the world’s leading AI robotics powerhouse by 2030, deploying humanoid robots across ten major industries by 2028.

This is not simply a bet on AI. It is a nation concentrating its capital, industrial capabilities, and technological expertise on owning the AI supply chain.

Of course, concentrating so much of an economy around a single technological wave carries significant risk, especially when many still view AI as a bubble. But if South Korea is right once again, the upside could be extraordinary — extending the country’s technological leadership and fueling another generation of exceptional economic growth.

Conclusion

South Korea is betting its future on AI.

Meanwhile, Brazil keeps reminding itself:

“Brasil é Agro.”