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 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 Industrial Bank of Korea's headquarters to discuss strategies for discovering and supporting leading companies and projects in the physical AI sector as part of the 'National Growth Fund-M.AX Frontier Project.'

The M.AX Frontier Project is an industrial and financial collaboration initiative aimed at nurturing leading companies in the M.AX sectors, including robotics, AI factories, and future vehicles. The Ministry of Trade supports the AI transformation and technological innovation of manufacturing companies through the M.AX Alliance, while the Financial Services Commission backs large-scale investments and scaling for promising firms via 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), who shared their growth strategies. Financial institutions such as the Industrial Bank of Korea, Korea Development Bank, 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 for 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, approximately 16 trillion won will be allocated to 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, working on a project that incorporates AI into the production and quality inspection processes of long-distance, heavy-duty submarine cables.

Attending companies emphasized that to lead in the AI era, long-term patient capital is essential for large-scale facility investments, establishing validation infrastructure, and global expansion, beyond just research and development support. They noted that the AI transformation is too significant for individual companies to manage solely through their investment capabilities, highlighting the importance of policy financing.

Eo Eung-joon, Chairman of the Financial Services Commission, stated, "The physical AI that will be implemented in our country's diverse and high-quality manufacturing sites will significantly contribute to enhancing productivity and creating 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."