South Korea will allow its sovereign wealth fund to invest in domestic industries for the first time under a new government plan aimed at boosting artificial intelligence, data centres and other strategic sectors.
The government annouced Friday that it will establish a new 20 trillion won investment account under the Korea Investment Corporation (KIC), marking a major expansion of the fund’s role beyond managing overseas assets.
South Korea announced a major strategic shift by injecting ₩20 trillion (approximately $13.9 billion) into its sovereign wealth fund, Korea Investment Corporation (KIC), to invest in artificial intelligence, data centers, semiconductors, power infrastructure, and other strategic… pic.twitter.com/TcpwWoB18u
— GUL (@gulVasikova) July 31, 2026
The capital will come from public institutions, including policy banks, with operations expected to begin in 2027 after lawmakers approve amendments to the Korea Investment Corporation Act. Unlike KIC’s existing portfolio, which mainly invests abroad, the new account will be allowed to invest inside South Korea.
Why South Korea is investing its sovereign wealth fund at home
The government said the new investment vehicle is designed to attract more global capital into South Korea’s technology sector, particularly projects linked to AI infrastructure and advanced computing.
Officials believe having a government-backed domestic investor could encourage foreign sovereign wealth funds and large asset managers to increase investments in Korean technology companies. They also stressed that the account will operate independently from KIC’s foreign reserve portfolio despite serving broader national policy goals.
KIC managed about 232 trillion won in assets at the end of 2025, making it one of Asia’s largest sovereign wealth funds. The new account will operate separately from its existing foreign asset portfolio while focusing on long-term returns and strategic domestic investments.
AI funding plans mobe forward alongside startup investment push
The sovereign investment plan follows a series of government efforts to strengthen South Korea’s technology sector.
President Lee Jae-myung recently met leading Silicon Valley venture capital firms, including Sequoia Capital, Andreessen Horowitz and Lightspeed Venture Partners, encouraging greater investment in Korean startups. At the same time, the National Pension Service signed cooperation agreements with several global venture firms to expand long-term investment opportunities.
Local media also reported that the government is preparing a proposed 200 trillion won National Growth Fund to support AI, semiconductors and other advanced industries through a mix of public, private and overseas capital.
Digital asset reforms continue advancing in parallel
South Korea continues work on a broader regulatory framework for digital assets. Earlier this week, a policy report from Hashed Open Research and the Solana Policy Institute recommended introducing temporary licensing rules for stablecoins before the Digital Asset Basic Act is finalized. The proposal outlined phased oversight for stablecoin issuers, payment services and foreign-issued tokens.
Meanwhile, the Financial Services Commission is working to combine multiple pending crypto bills into a single Digital Asset Basic Act covering stablecoin issuance, exchange operations, disclosures, internal controls and operational resilience. Authorities have not announced a timeline for the legislation.
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