South Korean President Lee Jae-myung placed artificial intelligence at the heart of his administration’s economic vision, pledging to transform the country’s industries, public services and defense through aggressive AI investment and policy support.

Delivering his first budget address to parliament since taking office in June, Lee described the 2026 budget plan as “the first national budget for the AI era,” signaling a sweeping policy shift after months of political turbulence triggered by his predecessor Yoon Suk-yeol’s failed attempt to impose martial law.

“In the AI era, being late by a single day means falling behind by an entire generation,” Lee told lawmakers Tuesday. “Since we got off to a late start, we must now move faster and work harder to catch up with the frontrunners — only then will we have a chance.”

The Lee administration will more than triple AI investment to 10.1 trillion won ($7 billion) next year as part of a broader 728 trillion won budget proposal, aimed at reviving growth, overcoming demographic decline and preparing for a wave of global trade and technology upheaval, he said.

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Lee said AI would serve as the foundation for future competitiveness across key sectors such as robotics, automobiles, semiconductors and logistics. He vowed to foster “physical AI” capabilities by combining Korea’s manufacturing base with real-time data, while also pushing for wide adoption of AI in areas like biotech, public health, education and taxation.

He also outlined plans to boost the country’s computing capacity and train more skilled workers, saying the government will speed up the purchase of high-performance computer chips and provide advanced AI education.

On security, Seoul plans to boost the defense budget by 8.2 percent to 66.3 trillion won, with a focus on upgrading conventional weapons and AI adoption — that brings up outlays to 2.4 percent of gross domestic product. Lee said self-reliant defense is a matter of national pride.

While opposition lawmakers remain wary of his expansive agenda, Lee urged bipartisan cooperation, calling 2026 a historic inflection point.

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Lee delivered the address in a half-empty chamber as the main opposition People Power Party boycotted the speech, citing a recent arrest warrant sought for lawmaker Choo Kyung-ho, who served as finance minister under former president Yoon.