U.S., China escalate AI subsidy race as Korea seeks response options

Ministry of Trade, Industry and Resources MI

As major economies ramp up large-scale investment to foster advanced industries such as artificial intelligence and semiconductors, the South Korean government has begun preparing countermeasures to the intensifying global subsidy race.

According to government and industry sources on Sunday, the Ministry of Trade, Industry and Resources has commissioned a research project titled “Global trends in subsidies for advanced industries and Korea’s response strategy.” The ministry said the study aims to assess current industrial policies and subsidy frameworks in advanced sectors, including AI, and to establish Korea’s response amid a rapidly changing global trade environment.

The ministry said that discussions on subsidies and industrial policy are expected to accelerate from March next year, when the 14th ministerial conference of the World Trade Organization is scheduled to take place. Against this backdrop, officials see the need to analyze policy trends in major economies and clarify Korea’s stance.

The move comes as the existing WTO framework, which in principle prohibits subsidies that directly support exports in specific industries, has been increasingly strained. The United States, China and the European Union have all launched aggressive investment programs to strengthen their competitiveness in advanced technologies.

In March, the Chinese government announced plans to establish a fund worth 1 trillion yuan ($142.9 billion) to invest in cutting-edge technologies such as AI and quantum computing.

In the United States, the private sector has taken the lead, with OpenAI, Oracle and SoftBank unveiling “Stargate,” a $500 billion AI infrastructure initiative. At the same time, Washington has been directly supporting the industry by funding AI research and computing infrastructure, while providing about $52.7 billion in fiscal support to bolster the semiconductor supply chain, a key input for AI training.

The European Commission has also stepped up its efforts. In December last year, it announced a plan to invest around 1.5 billion euros ($1.76 billion) to build “AI factories” centered on public supercomputing centers. This was followed in October by a decision to allocate an additional 1 billion euros to promote the adoption of AI across industries.