South Korea Opens 20 Trillion Won KIC Account to Back AI and Chips

Overview

• The government approved a new strategic investment account inside the Korea Investment Corporation on July 31, seeded with at least 20 trillion won to make long-term domestic equity investments.
• About 16 trillion won will come from shares held by state-run lenders and roughly 4 trillion won from private shares accepted for inheritance and gift taxes, with the vehicle designed to hold investments without a fixed maturity.
• The account is targeted at artificial intelligence, semiconductors, data centers, robotics, defense and biotechnology and is intended to act as a domestic anchor to attract sovereign wealth funds, pension funds and global asset managers.
• Officials say the account will operate separately from KIC’s foreign-reserve portfolio with governance safeguards and an independent investment process, but it must wait for amendments to the Korea Investment Corporation Act that the government plans to submit in August.
• Policy makers framed the move as a response to heavy private chip and AI spending plans and recent market weakness, yet analysts warn the plan faces legislative, execution and market risks that will determine how much it changes financing and jobs for Korean tech firms.