S.Korea official floats AI profit social tax as tech giants boom

AFP | Seoul

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A top South Korean official has proposed a tax on AI profits to be redistributed among society as a semiconductor boom drives massive earnings for tech giants Samsung Electronics and SK hynix.

The two South Korean firms have emerged as key suppliers of high-performance chips powering AI infrastructure globally, posting record first-quarter earnings as global demand surges.

South Korea’s benchmark Kospi has rallied over the past month, repeatedly hitting record highs and also briefly coming within a whisker of the key 8,000-point mark Tuesday.

South Korea was no longer operating as a traditional export economy and could be shifting towards a “technology monopoly economy” driven by scarcity of chips and sustained excess profits, Kim Yong-beom, senior presidential secretary for policy, said in a Facebook post late Monday.

While the shift towards a technology-dominant economy represented “the core essence of the possibilities currently open before Korea”, Kim warned it could also deepen polarisation of society.

Kim proposed what he tentatively called a “national dividend” for socially redistributing excess corporate profits from AI technology.

The tech tax could be used, for example, to provide startup support for young people, basic income programmes for rural and fishing communities, support for artists and stronger pensions for the elderly, he said.

“Using a portion of excess profits to ensure social stability for the current generation and mitigate transition costs is not merely redistribution, but also a type of system maintenance cost.”

The presidential Blue House said Kim’s post reflected “his personal opinion”.