The artificial intelligence (AI) and renewable energy industries are expected to benefit the most under South Korea’s incoming administration.

President-elect Lee Jae-myung presented a vision to usher in an era of 100 trillion won ($72.53 billion) in AI investment and elevate Korea to one of the world’s top three AI powerhouses. His plan is to lead a major transformation via AI, foster the ecosystem, and support the development of next-generation AI semiconductors - with a key focus on bold regulatory reform.

He will also designate AI as a national strategic technology and classify data centers, which are core infrastructure, as “national strategic technology commercialization facilities” to streamline regulations. This will reduce barriers in areas such as power supply, site selection, and business permitting.

Lee additionally proposed creating a national AI data cluster to establish a global AI hub, as well as expanding AI special zones where regulatory exceptions apply to laws such as the Patent Act and the Immigration Act.

The new administration is also proactive in securing funding, with a 100 trillion won AI investment fund to be created jointly by the government and the private sector.

Lee pledged to create a new chief secretary position for AI policies at the presidential office, and the plan is to form a government-wide strategic organization to play a comprehensive role in industry planning, including regulatory reform.

In the energy sector, the focus is on promoting renewable energy instead of nuclear power. One of the incoming president’s flagship policies is to shut down coal-fired power plants by 2040 and attract renewable energy industries to the affected areas.

The new administration will continue and implement the solar and wind energy development policies initiated under the previous Moon Jae-in administration even further.

For solar power, it plans to expand rooftop solar systems on general buildings and promote the distribution of solar panels for self-consumption as well as expanding building-integrated photovoltaics (BIPV) to enhance distributed power generation in urban areas.

For offshore wind power, the new government is considering measures to strengthen the competitiveness of equipment threatened by Chinese products, including the creation of specialized development zones.

The government plans to turn regions such as South Jeolla Province, the southwestern coast, and Jeju Island into hubs of offshore wind power while also building a supply chain ecosystem for materials, components, and equipment in offshore wind to boost global competitiveness.

There will also be preemptive investments in power grid connections for large offshore wind farms.

An official from the Federation of Korean Industries commented, “As President-elect Lee has declared his intention to foster AI and renewable energy as national strategic industries, these areas will likely become core beneficiaries of the new administration.”

“In particular, plans to expand AI infrastructure - such as easing data center regulations and increasing public investment - could send positive signals to businesses,” he added.

Lee has also pledged support for the defense industry, promising to transfer defense-related functions that are currently under the National Security Office to the Senior Secretary for Economic Affairs at the presidential office to introduce a system in which the president will personally chair meetings on strategies to promote defense exports. This reflects his commitment to ease defense-related regulations and approval processes to promote industry growth as well as expand exports.

On the other hand, crisis industries such as petrochemicals and steel, which are facing increasing calls for restructuring, could undergo major overhauls. Major Korean petrochemical companies such as LG Chem Ltd. and Lotte Chemical Corp. have been unable to escape growing operating losses and business stagnation.

Lee pledged to enact special legislation and provide focused support to restore competitiveness in the petrochemical industry. This includes government-led structural reforms and active support for research and development (R&D) as well as the development of high-value-added specialty products.

In the steel industry, significant changes are expected under the new administration, such as carbon reduction policies and creating a new Ministry of Climate and Energy.

Lee has signaled a concrete willingness to act, an example of which is the transformation of Gwangyang in South Jeolla Province into a next-generation steel city centered on hydrogen-based steelmaking. There is keen interest in what specific policies will be introduced for this sector.

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