South Korea to Inject $139 Billion Into AI and Data Centers as KOSPI Posts Record Rally

South Korea's government announced Thursday that it will inject at least 20 trillion won (approximately $139 billion) into a new strategic investment account at the Korea Investment Corporation (KIC) for investments in artificial intelligence, data centers, and infrastructure. The move marks the first time KIC's mandate has been expanded beyond overseas assets to include domestic Korean assets — a historic policy pivot for the fund, which previously managed only foreign-exchange reserves totaling about $232 billion at the end of last year.

Market Reaction: A Record Day

The announcement triggered the largest single-day rally in KOSPI history: the index closed up 14–17.9% in early reports, reclaiming the 6,500-point level, with SK Hynix jumping 24.4% and Samsung Electronics rising 21.7%, both triggering sidecar trading halts. The rebound followed a brutal selloff — KOSPI had fallen over 17% in three trading days and dropped 38% from its June high of 9,410 to 5,817, with July's monthly decline of 33.2% setting a record that exceeded even the 1997 Asian financial crisis, driven by concerns over Korea's debt levels and whether chip giants' massive capex can sustain AI demand.

The Structure

Funding will come from equity contributions by policy banks and other public institutions, and the new account will be strictly separated from KIC's existing FX-reserve portfolio with independent decision-making. The government will submit amendments to the Korea Investment Corporation Act to parliament in August, with fund operations targeted to begin next year. Officials framed the fund as an «anchor investor» to attract foreign sovereign wealth funds and global asset managers, while supporting strategic industries and providing buffers for economic security and asset markets.