--- title: "South Korea Plans $14 Billion Injection into Sovereign Wealth Fund, Betting on AI and Data Centers" type: "News" locale: "en" url: "https://longbridge.com/en/news/294444087.md" description: "According to the government statement, the newly established special account will be set up within the existing structure of the Korea Investment Corporation (KIC), with an initial size of no less than 20 trillion South Korean won. Funding sources will include equity contributions from public institutions such as policy banks. The most landmark change in this adjustment is that KIC's investment mandate will extend to domestic assets for the first time" datetime: "2026-07-31T02:37:40.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294444087.md) - [en](https://longbridge.com/en/news/294444087.md) - [zh-HK](https://longbridge.com/zh-HK/news/294444087.md) --- # South Korea Plans $14 Billion Injection into Sovereign Wealth Fund, Betting on AI and Data Centers The South Korean government announced a capital injection of 20 trillion South Korean won (approximately $13.9 billion) into its sovereign wealth fund, the Korea Investment Corporation (KIC), specifically for investments in artificial intelligence, data centers, and infrastructure. This move also marks the first inclusion of domestic assets in its investment scope, signaling a major strategic shift for the South Korean sovereign wealth fund. On July 31, Bloomberg reported that the plan was officially announced via a government statement on Friday. The announcement came amid severe volatility in the South Korean stock market—the KOSPI index had cumulatively fallen more than 17% earlier in the week, marking its largest recent decline, primarily dragged down by rising debt levels and market doubts about the sustainability of massive capital expenditures by the two chip giants. Boosted by the news of the capital injection, the KOSPI index surged as much as 17% during Friday's trading session, staging a strong rebound. The South Korean government stated that the capital injection aims to "proactively respond" to the growing interest of global capital in South Korean investments, positioning KIC as an "anchor investor" to attract foreign sovereign wealth funds and asset management institutions into the South Korean market. The government plans to submit amendments to the Korea Investment Corporation Act to the National Assembly as early as next month, with the new account expected to officially begin operations next year. ## Scale of Capital Injection and Funding Sources According to the government statement, the newly established special account will be set up within the existing structure of KIC, **with an initial size of no less than 20 trillion South Korean won. Funding sources will include equity contributions from public institutions such as policy banks.** The government emphasized that the management of the new account will maintain a completely independent investment decision-making mechanism and will be strictly segregated from KIC's existing foreign exchange reserve management portfolio to ensure clear risk boundaries between the two types of assets. As of the end of last year, KIC managed assets totaling $232 billion, overseeing national foreign exchange reserves entrusted by the government, the Bank of Korea, and public institutions. **The most landmark change in this adjustment is that KIC's investment mandate will extend to domestic assets for the first time.** Previously, KIC's functional role had always focused on the allocation and management of overseas assets. The government stated that the new account will support the growth of strategic industries, create returns for future generations, and serve as a buffer at the levels of national economic security, foreign exchange, and asset markets. **In terms of investment direction, building the AI ecosystem is listed as the core driver.** The government pointed out that South Korea possesses core competitiveness in constructing an AI ecosystem, an advantage that is attracting continuous attention from global capital. Introducing credible anchor investors will help leverage follow-on allocations from foreign sovereign wealth funds and international asset management institutions. To provide a legal basis for the new account, the South Korean government plans to submit a draft amendment to the Korea Investment Corporation Act to the National Assembly next month, expecting to officially launch the fund's operations for the new account next year. The overall pace of implementation indicates that the government hopes to achieve a breakthrough in legislation as soon as possible to establish the strategic layout of South Korean sovereign capital before the global AI investment competitive landscape becomes further entrenched. **Although the government statement did not directly link the above plan to the current market turmoil, the timing of the announcement is quite sensitive.** The KOSPI index fell more than 17% cumulatively over the three trading days prior to the announcement. Concerns about South Korea's debt levels and doubts about whether the large-scale capital expenditures of chip giants like Samsung Electronics and SK Hynix could continue to support AI industry demand were the main triggers for this round of declines. This capital injection plan is the latest component of a series of measures recently introduced by the South Korean government to stabilize the stock market. After the news was released, the KOSPI index surged as much as 17% during Friday's trading session, significantly repairing market sentiment. 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