Lee Jae-myung Declares AI Economic Security, Bolstering Global Competitiveness

The Lee Jae-myung Administration's AI Economic Security Declaration and the Double-Edged Sword of a High-Speed Race Amidst Industrial Upheaval

Immediately upon his return on the morning of the 3rd, concluding a 7-day, 11-nation tour of the United States, South America, and Germany, President Lee Jae-myung called for bold investment and a national push to accelerate efforts in response to the AI-centric industrial upheaval. During his tour, President Lee met with global AI leaders, including NVIDIA CEO Jensen Huang, and diagnosed the situation as the beginning of seismic shifts that are fundamentally reshaping the global industrial landscape. Specifically, at an economic affairs review meeting held at Cheong Wa Dae on August 4, 2026, the President emphasized that AI is not merely a technological advancement but a cornerstone of economic security directly linked to national survival.

The President recalled a dinner with global AI leaders held at a restaurant in San Francisco during his tour, revealing a concrete sense of urgency regarding the disruptive innovation that artificial intelligence will bring across all industries. The government plans to implement aggressive support measures based on the semiconductor and AI ecosystem enhancement strategy announced in June with Samsung Electronics and SK Hynix. This is interpreted as a reflection of the President's strong will to create an environment where private sector creative investment can occur in a timely manner, mobilizing all means beyond simple financial support, including administrative, financial, and regulatory easing.

Strategic Choice for Global Supply Chain Realignment and a Leap to AI G3

The key achievements of this tour can be summarized as AI and supply chain diplomacy. At a meeting with the Korean diaspora in Frankfurt, Germany, President Lee emphasized that the competitiveness of the Korean economy lies in its global network, asserting that just as the dedication of Korean miners and nurses in Germany laid the foundation for today's Korean industry, AI technology must now become the new national competitive edge. He particularly revealed a plan to stably secure a supply chain of critical minerals essential for AI semiconductor manufacturing by linking technological cooperation with Germany and resource diplomacy with South America.

Within the government, there is a consensus that Korea must not miss the golden opportunity to join the ranks of the world's AI leaders, the so-called G3 (top three countries). President Lee defined the current changes as an era of great upheaval and warned that past conventional regulations or administrative procedures should not hinder innovation. In fact, the government is concentrating administrative efforts on removing investment obstacles for businesses, such as designating the Saemangeum Comprehensive Bonded Zone in conjunction with Hyundai Motor's large-scale investment. This policy direction is interpreted as a strategic choice to drive private-led growth by the government acting as a catalyst for the market.

President Lee Jae-myung diagnosed the current situation by stating, "The world is currently facing an era of great upheaval where the industrial framework is changing entirely around artificial intelligence." He added, "Without bold investment and a high-speed race, future competitiveness cannot be guaranteed."

Political Disputes and Legislative Challenges: Variables in Securing Innovation Momentum

However, for the government's aggressive AI fostering strategy to yield actual results, it must overcome numerous political challenges. The opposition, including the People Power Party, is sharply criticizing the procedural issues and incompetence observed in the Lee Jae-myung administration's policy implementation. In particular, the controversy surrounding the abolition of the prosecution's supplementary investigation rights due to proposed amendments to the Code of Criminal Procedure, and the subsequent concerns about a security vacuum, are diverting energy that should be focused on industrial innovation. Han Byung-do, acting floor leader of the ruling Democratic Party of Korea, emphasizes that prosecutorial reform is the starting point for a fair judicial system, but resistance from the conservative camp remains strong.

Concerns about policy sustainability are also being raised. According to a recent survey by PMI, a slight crack has been detected in the support rate among moderates, which had shown strength since the administration took office. This, coupled with the President's personal legal risks, such as the first-instance ruling related to violations of the Public Official Election Act, could weaken the momentum for policy implementation. While the government is showing efforts to manage the livelihoods economy through measures to stabilize the real estate and stock markets, the opposition criticizes these as cards for turning the tide and continues a head-on confrontation, proposing parliamentary investigations. Ultimately, whether legislative support and budget allocation for AI industry development proceed smoothly is expected to be a key variable determining the success or failure of the future industrial transformation.

Policy Balance Between Inducing Private Investment and Tax Equity

President Lee has also voiced his opinions on advancing the capital markets and realizing tax justice, no less important than industrial development. His recent raising of the issue of tax burden equity between capital gains from real estate and earned income is a prime example. The perception that the taxes imposed on 10 billion won in capital gains are excessively low compared to the income tax for ordinary workers is seen as a signal to re-examine the entire taxation system for capital gains. This demonstrates the Lee Jae-myung administration's unique pragmatic approach of providing bold incentives to businesses while strengthening fairness in taxing individuals' asset income.

Stabilizing the stock market is also an urgent task. Immediately upon his return, President Lee presided over a closed-door meeting where he reviewed the volatility of the domestic stock market and ordered the preparation of measures to protect investors. This is based on the judgment that creating a transparent and stable financial market is essential to promote capital inflow into advanced industries such as AI and semiconductors. Amidst critical views from the political sphere regarding the performance bonus systems of large corporations like Samsung Electronics and SK Hynix, the government is contemplating a win-win model where corporate performance can be spread throughout society. Only when these policy efforts are combined can the AI-based industrial advancement that the government aims for translate into tangible economic growth.

The outlook for the future is a mix of optimism and concern. The government's goal of becoming an AI G3 nation is expected to materialize when strong leadership is combined with private sector technological prowess. However, there are also significant concerns that timely policy execution may become difficult if political confrontation and veto politics persist. For the high-speed race emphasized by President Lee not to remain mere rhetoric, legislative support through cooperation is essential. As the world engages in a competition for AI sovereignty, market and industry attention is focused on the government's next moves to determine if Korea can turn this era of upheaval into an opportunity.