Baek Kyunghoon: "Tax Incentives and Regulatory Easing for AI Data Centers... 300 Billion KRW Public-Private Investment"

KIF Lifespan Extended to 2040
Over 240 Billion KRW to Be Invested in Core and Foundational AI Technologies This Year

Baek Kyunghoon, Minister of Science and ICT, announced plans to strengthen support measures for enhancing the competitiveness of the AI (Artificial Intelligence) industry, including tax incentives for data center and facility investments and regulatory improvements. He also revealed that the government will work with the private sector to establish a dedicated AI sub-fund worth 300 billion KRW.

Minister Baek made these remarks during a pre-event meeting with SK Telecom CEO Yoo Youngsang, KT CEO Kim Youngseob, and LG Uplus Vice President Lee Cheolhoon, held prior to the "Government-Telecom AI Investment Cooperation Declaration Ceremony" at The Westin Josun Seoul on August 12.

The Ministry of Science and ICT, together with SK Telecom, KT, and LG Uplus, held the declaration ceremony to jointly announce the expansion of AI investment through the establishment of a KIF (Korea IT Fund) sub-fund and to strengthen the competitiveness of the AI industry through public-private cooperation. This collaboration follows the decision to extend the lifespan of KIF, which is funded by the three major telecom companies, from the original end date of 2030 to the end of 2040, a 10-year extension.

Minister Baek stated, "As AI becomes the driving force behind all innovation, I hope this sub-fund will serve as a catalyst for the growth of AI companies. The government will also expand the annual AI Innovation Fund from the current 90 billion KRW to 300 billion KRW, about three times the current amount."

KIF, established in 2002 with a total investment of 300 billion KRW from SK Telecom, KT, and LG Uplus, is a private master fund that has so far created 91 sub-funds and invested 4.7 trillion KRW in 1,669 promising ICT startups. This year, the master fund will make a new investment of 150 billion KRW and, including matching funds from management companies, will establish sub-funds totaling over 300 billion KRW. Of this, more than 240 billion KRW will be focused on promising companies in the fields of core and foundational AI technologies, as well as AI transformation and application (AX). Additionally, a dedicated AI semiconductor fund worth 40 billion KRW and an ICT technology commercialization fund worth 20 billion KRW will be separately established.

The declaration ceremony was attended by executives from KIF investor companies, the Korea Telecommunications Operators Association (KTOA), the KIF Investment Management Committee, and representatives from venture capital firms (VCs), with more than 200 participants discussing AI investment directions and cooperation strategies.

Meanwhile, applications for the 2025 KIF sub-fund management companies (16 firms) will be accepted from today until August 28, with detailed information available on the KTOA website.