National Growth Fund to Invest 16 Trillion Won in Physical AI, Starting with LS Cable

On July 1, the Financial Services Commission and the Ministry of Trade, Industry and Energy announced plans to utilize the National Growth Fund to identify leading companies in the manufacturing sector's AI transformation (M.AX). They aim to inject approximately 16 trillion won into the physical AI sector, which includes robotics, AI factories, and future vehicles, to expand investment demand and enhance the competitiveness of the manufacturing industry.

The two agencies held a public-private meeting at the Korea Development Bank to discuss strategies for discovering and supporting leading companies and projects in the physical AI sector as part of the M.AX Frontier Project. This initiative is a collaborative effort between industry and finance to nurture leading companies in areas such as robotics, AI factories, and future vehicles. The Ministry of Trade will support the AI transition and technological innovation of manufacturing companies through the M.AX Alliance, while the Financial Services Commission will back significant investments and scaling up of promising firms through the National Growth Fund.

Key companies in attendance included those from the AI factory sector (LS Cable, CJ Logistics, Isu Petasys, Daesung Hi-Tech), robotics (Doosan Robotics, Wonik Robotics), and future vehicles (Hyundai Mobis, LX Semicon, MagnaChip Semiconductor). Financial institutions such as the Korea Development Bank, Industrial Bank of Korea, NH Financial Group, KB Kookmin Bank, Hana Bank, and Woori Bank also participated.

The Financial Services Commission plans to jointly identify promising leading companies and mega-projects in key markets related to physical AI, including AI factories, robotics, future vehicles, defense, semiconductors, and secondary batteries, in collaboration with the Ministry of Trade's M.AX Alliance. This year, they will provide around 16 trillion won in funding across these six sectors closely related to physical AI.

The first M.AX investment project selected is LS Cable's expansion of its high-voltage submarine cable production facility. LS Cable is participating in the M.AX Alliance's AI factory division, focusing on integrating AI into the production and quality inspection processes for long-distance, heavy submarine cables.

Attending companies emphasized the necessity of long-term patient capital to lead in the AI era, highlighting the importance of substantial facility investments, establishing demonstration infrastructure, and global expansion beyond just research and development support. They noted that the AI transition is too significant for individual companies to manage solely through their investment capabilities, underscoring the critical role of policy finance.

Eo-kyun Lee, Chairman of the Financial Services Commission, stated, "The implementation of physical AI in our diverse and high-quality manufacturing sites will significantly contribute to productivity improvement and the creation of new growth engines. The National Growth Fund will serve as a means to realize the vision of South Korea becoming a global leader in physical AI and will act as a catalyst for private investment."