South Korea is making a serious push into the AI chip game, and it's bringing in some heavyweight help. The country's industry ministry just inked a deal with SoftBank Group (SFTBY) (SFTBF) chip unit Arm Holdings (ARM) to boost its semiconductor and artificial intelligence capabilities. The centerpiece? A dedicated chip design school that will train roughly 1,400 specialists.
Presidential policy adviser Kim Yong-beom announced the agreement on Friday, explaining that Arm will leverage its global chip design expertise to strengthen South Korea's relatively weak system-semiconductor and fabless segments. For those keeping score at home, Arm makes its money by licensing chip designs worldwide and collecting royalties—a model that's made it central to the global semiconductor ecosystem.
SoftBank's AI Vision Meets Korean Ambition
SoftBank CEO Masayoshi Son met with South Korean President Lee Jae Myung on Friday and didn't mince words about where things are headed. Rising AI demand will sharply increase chip requirements, he said, but there's a catch: energy infrastructure is becoming a serious bottleneck for AI development in South Korea.
Son also doubled down on his familiar themes about artificial superintelligence, arguing that AI will surpass human intelligence and could eventually become "10,000 times smarter than people." His advice? Stop trying to control AI and start learning to coexist with it.
South Korea isn't just listening—it's putting money where its mouth is. President Lee has been meeting with a who's who of tech leaders, including OpenAI CEO Sam Altman and Nvidia CEO Jensen Huang, as part of the country's goal to become a top-three global AI power. Nvidia has confirmed it will supply more than 260,000 advanced AI chips to the South Korean government and major companies, including Samsung Electronics.
Trade Tensions Cool Down
The timing for all this cooperation is better than it was a few months ago. South Korea's geopolitical relationship with the U.S. has improved following a significant tariff cut.
In December, U.S. Commerce Secretary Howard Lutnick confirmed that the general tariff rate on South Korean imports—including autos—dropped to 15%, activating key provisions of the countries' trade deal after Seoul moved forward with its strategic-investment legislation. The cut was retroactive to November 1, 2025, and aligns Korea's reciprocal rates with those of Japan and the EU while removing U.S. duties on airplane parts.
South Korea's ruling party introduced legislation to honor its $350 billion investment pledge in U.S. sectors such as shipbuilding. Lutnick said the move strengthens mutual trust and deepens the economic partnership supporting U.S. industry and jobs. The U.S. had previously imposed a 25% tariff on South Korean imports, including Section 232 national-security auto duties and reciprocal tariffs under IEEPA.
Big Tech Makes Big Bets
The Arm deal is just one piece of a much larger investment puzzle. Back in October, Amazon.com (AMZN) Amazon Web Services committed to invest at least $5 billion in South Korea by 2031 to build new AI data centers. AWS CEO Matt Garman announced the plan alongside President Lee at the APEC 2025 summit, saying AWS will place the facilities on Seoul's outskirts.
That $5 billion is folded into a broader $40 billion plan spanning 14 non-U.S. APEC economies through 2028—a move Garman said will add $45 billion to U.S. GDP and deliver wider regional gains. Amazon joins six other companies pledging a combined $9 billion over five years as South Korea doubles down on AI infrastructure.
Amazon's move followed Alibaba Group Holding's second Korean data center and OpenAI's partnership with Samsung Electronics and SK Hynix to build a dedicated AI facility.
ARM Price Action: Arm Holdings stock is up 1.41% at $142.48 at publication on Friday.
