S. Korea to invest over 1,000 trillion won in AI data centers by 2035, minister says

Deputy Prime Minister and Minister of Science and ICT Bae Kyung-hoon said Sunday that South Korea will pursue more than 1,000 trillion won in investment in AI data centers by 2035.

Bae also said the next three years represent a "golden time" for the country to emerge as the top power in physical AI, and outlined plans to nurture the sector as a national strategic industry.

Speaking at the "Three Mega-Projects National Report to the People" event at Cheong Wa Dae, Bae said the government would invest 550 trillion won ($356 billion) — equivalent to 8.4 gigawatts of capacity — in AI data centers by 2029.

He added that the plan would move beyond concentration in the Greater Seoul area by building AI data centers in each region across the country. "By 2035, we will build an additional 10 gigawatts of AI data centers, bringing the total to 18.4 gigawatts and driving more than 1,000 trillion won in investment in South Korea," he said.

Bae said the government would designate physical AI as a national strategic industry. "The next three years are the golden time for South Korea to become the No. 1 power in physical AI," he said. "The government will lead the way by designating physical AI as a national strategic industry."

Bae said South Korea is well positioned to lead in physical AI. "We have a strong manufacturing-based industrial infrastructure and world-class AI capabilities," he said, adding that the world's top two semiconductor companies are based in South Korea.

He placed particular emphasis on data acquisition. "Bringing physical AI to the level of today's large language models could take 100,000 years at the current pace," Bae said. "It is critical to secure as much real-world data as possible while building purpose-built virtual simulation environments to generate synthetic data."

Bae said the government plans to develop a general-purpose physical AI foundation model based on a "world model" architecture within three years. Building on that, it will develop sector-specific models for real-world deployment and pursue domestic production across the entire physical AI full stack.

"We will actively support physical AI platforms so they can become an export industry," Bae said. He added that the government aims to boost productivity in key industries by 20 percent through physical AI, creating a decisive competitive edge, while deploying home robots to meet welfare needs, revitalize regional economies and achieve zero workplace fatalities — all as part of a sustainable growth strategy for South Korea.