South Korea's Ministry of Economy and Finance announced on February 5 the creation of a 34 trillion KRW (USD 230 billion) high-tech fund to support batteries, biotechnology, and other advanced industries, as reported by the Commercial Daily News on Feb 6. The initiative aims to counter potential U.S. trade policies under a second Trump administration and strengthen the country's AI leadership amid rising competition from China's DeepSeek. The fund, more than double last year’s USd115 billion (17 trillion KRW) semiconductor package, will be managed by the Korea Development Bank (KDB) and support SMEs in components, equipment, and materials sectors.
In response to the global AI race, South Korea is accelerating efforts to establish a national AI computing center and will hold an AI Committee meeting this month to strategize on becoming a top-three AI leader. While Trump's potential tariffs on Chinese batteries could boost South Korean battery makers, higher U.S. tariffs on automobiles pose a risk, as automotive exports account for over 50% of South Korea’s total exports.
Commenting on DeepSeek’s rise, Chris Hung, Director General of the Taipei-based Market Intelligence & Consulting Institute (MIC), noted that lightweight AI and its continued expansion across industries will remain a key trend. As AI models become more advanced, lower costs and broader integration into everyday applications will be beneficial in the long run. While there are concerns about DeepSeek’s impact on industry players, Hung pointed out that DeepSeek and Nvidia maintain an upstream-downstream relationship, particularly in computing power and chip development, offering opportunities for collaboration.