How chip-fuelled wealth is reshaping South Korea
An unkempt man walks into a pricey shop. The staff dismiss him—until he takes off his jacket and reveals a gilet emblazoned with “SK Hynix”, a semiconductor firm known for handing out massive bonuses. This imagined scene—a recent skit on a South Korean comedy show—lampoons real ones unfolding as AI-driven wealth floods the country. Companies that help arrange marriages report a big uptick in the desirability of engineers from SK Hynix and Samsung Electronics, another semiconductor maker. They are now nearly as sought after as doctors and lawyers. An AI windfall is reshaping South Korean society. Speaking in Silicon Valley on July 25th, Lee Jae Myung, South Korea’s president, compared the dawn of the AI era to the discovery of fire and called it “a truly new opportunity for Korea”. But the new era also brings new risks: South Korea’s benchmark stock index, KOSPI, has doubled in value in the past year but dipped 22% in July. A series of wild swings have made it the most volatile stock market in the world. Fierce debates rage in Seoul, the capital, over how to ensure that new wealth is shared equitably and stewarded sustainably. “This raises a new policy challenge for us: how should we approach such extraordinary excess profits from a socio-economic perspective and from the standpoint of national policy?” Mr Lee said during an interview with The Economist in June. The following month his government announced a “Future Response Fund” to invest newfound tax revenue for the benefit of generations to come. The market gyrations and policy debates are a preview of processes likely to play out elsewhere as AI adoption spreads. “This is an issue that requires broader international discussion,” Mr Lee added.
