South Korean senior officials suggest: AI super profits should be distributed to all citizens

【Introduction】Why Did the Korean Stock Market Plunge?

Hello everyone, this year’s hottest stock market, the Korean stock market, suddenly plummeted today. Let’s take a closer look at what exactly happened.

On May 12th, the previously soaring Korean stock market experienced a significant decline, dropping over 5% at one point during the trading session, then the decline narrowed.

Taylor checked and found that it was a big news story that scared the stock market.

On the news front, a senior policy maker in South Korea stated that Korea should use profits from artificial intelligence-related taxes to distribute “dividends” to citizens. This statement highlights that, as the AI boom has allowed chip manufacturers like Samsung Electronics and SK Hynix to make huge profits, the pressure to redistribute earnings is rising.

After the head of the Korean Presidential Policy Office, Kim Yong-beom, made this comment on Facebook, the Korean stock market experienced intense volatility on Tuesday, with investors initially unsure of the scope of this proposal. The benchmark index, the Korea Composite Stock Price Index (KOSPI), once fell by 5.1%, then narrowed after this influential policy advisor clarified. He stated that he was referring to “excess taxes” generated by the AI boom, not a new super-profit tax on corporate profits. Samsung and SK Hynix stock prices also recovered most of their early losses.

Kim Yong-beom’s remarks highlight that economists and politicians are increasingly concerned about the potential widening of income inequality in the AI era. In Korea, these concerns have already turned into public calls: demanding that industry leaders share more of the benefits brought by the global AI infrastructure boom.

Samsung’s operating profit in the quarter ending March surged 48 times, expected to surpass Apple and Alphabet, becoming the second most profitable tech company in the world after Nvidia. SK Hynix is also close behind, with projected profits reaching 23.9 trillion Korean won by 2026.

Analysts said, “This also indicates that Asian economies are indeed trying to send a signal: in a shared future involving digitalization, including AI, the public should have a certain sense of participation. Korean officials are now proposing a plan based on excess taxes, so taxpayers are becoming quite cautious, worried that they might end up paying the bill themselves rather than the government.”

Currently, the scale of potential dividends and other details about how Kim Yong-beom’s proposal will be implemented are not immediately clear. But investors are already paying close attention.

The KOSPI suddenly reversed and rebounded, showing that market sentiment has become quite fragile after this year’s rally. As of Monday, the Korean benchmark index has risen nearly 86% this year. Although optimism remains strong, with some Wall Street strategists even predicting the KOSPI will rise to 10,000 points, foreign investors have been reducing their holdings of Korean stocks this month.

Lombard Odier Singapore strategist Lee Hoh-min said, “The rapid speed of the decline indicates that the trigger was the unexpected comment from Kim Yong-beom, head of the Blue House Policy Office, about distributing ‘AI dividends’ to citizens.” The Blue House is the Korean presidential residence. “As Kim Yong-beom slightly retracted his statement and denied that it was a super-profit tax, market sentiment seems to have rebounded.”

In less than five months this year, the Korean stock market’s gains have already exceeded the rally that led the world in 2025. This rally was mainly led by Samsung and SK Hynix, both of which have doubled their stock prices this year.

DS Asset Management fund manager Yoon Joon-won said, “The sharp drop in KOSPI this time indicates that, in a market with overly concentrated gains, ‘investors can feel uneasy at any time.’ Currently, Samsung and SK Hynix have absorbed a large amount of market liquidity.”

Kim Yong-beom is a senior advisor to President Lee Jae-myung. The Lee Jae-myung government has been emphasizing “inclusive” growth, with policy priorities including increasing household income, promoting regional development, and supporting small businesses and startups.

On Tuesday, Samsung and its labor union entered the final day of wage negotiations mediated by the government, trying to avoid a strike that could disrupt the operations of the world’s largest memory chip manufacturer. Last month, tens of thousands gathered outside Samsung’s major chip facilities, demanding more AI profit sharing. The Samsung union requested that 15% of operating profit be allocated to chip division employees.

The union threatened to initiate an 18-day strike starting May 21. Employee representatives pointed out that SK Hynix’s bonus levels are rising. Last year, SK Hynix agreed to allocate 10% of annual operating profit as a performance bonus pool, and employees believe they should also receive higher pay.

Kim Yong-beom wrote, “Excess profits in the AI era are essentially concentrated.” He said that storage companies, core engineers, and asset holders are likely to benefit greatly, while most middle-class people may only feel the indirect effects.

(Article source: China Fund News)