AGP Executive Report

AI Chip Deals & Data-Center Buildout: Nvidia’s Jensen Huang is in Seoul tying up new partnerships with SK Hynix, SK Telecom, Naver and Doosan, while South Korea’s tech ministry plans to secure thousands of GPUs for a state AI project—another push to scale “AI factories” locally. Market Mood: South Korean stocks slid more than 4% as US-Iran tensions flared and AI-related valuation worries hit tech; the won also weakened. Corporate Performance: Bank of Korea data shows corporate revenue growth slowed in 2025, with construction and oil refining dragging while profitability improved. Labor & Big Tech: Kakao workers staged the company’s first-ever strike over bonuses and profit-sharing, escalating pressure on management. Hydrogen Circular Economy: The government launched a KRW40.9bn program to recycle end-of-life hydrogen vehicle parts and recover critical minerals. Semiconductor Capex: Samsung Electronics reported nearly KRW90tn in 2025 capex and R&D, underscoring how aggressively it’s funding the next AI cycle.

AI Infrastructure Deals: Nvidia CEO Jensen Huang met South Korea’s top tech chiefs to expand AI memory, cloud and robotics partnerships, including SK hynix, Naver and Doosan for gigawatt-scale AI data centers, plus a state AI plan tied to thousands of GPUs. Economy & Markets: South Korea’s chip-led rebound is colliding with global risk-off swings as AI stock selloffs whipsaw Wall Street and pressure spreads to regional markets. Policy & Labor: South Korea’s labor minister urged tech firms to share “excess” AI windfalls, as regulators also step up scrutiny over won volatility and financial-firm behavior. Geopolitics: North Korea tightened border-area controls on gatherings and talk about South Korea, while Xi Jinping’s North Korea visit underscored deeper China ties amid denuclearization uncertainty. Business & Trade: The U.S. House passed a bill to formalize trilateral ROK-U.S.-Japan parliamentary dialogue, aiming to lock in cooperation on security and economic priorities. Culture & Media: Melon Music Awards 2026 will run Nov. 14-15 in Seoul, expanding to two days.

AI Infrastructure Push: SK Telecom plans a gigawatt-scale AI cloud in South Korea with Nvidia, using Nvidia’s DSX platform and targeting an initial rollout in 2027, as Korea’s chip-led AI boom keeps pulling in more compute and power demand. Market Mood: South Korean stocks snapped back sharply after Monday’s selloff, with the KOSPI closing up 8.18% as chipmakers led the rebound and investors returned to beaten-down tech. Quantum Security: SK Telecom was selected for the EU’s Horizon Europe program to develop quantum cryptography using QPIC-AI, aiming to reduce size and deployment costs for quantum key distribution. Corporate Deals: Nvidia CEO Jensen Huang met major Korean groups (including Samsung, SK, Hyundai and Naver) to line up AI data-center and chip/software cooperation, reinforcing Korea’s “AI factory” buildout. FX Watch: Authorities stepped up pressure on financial firms amid won weakness, while the won strengthened after verbal intervention. Labor Snapshot: South Korea’s jobless claims fell for a fourth straight month in May, with benefit applicants down 7.2% year-on-year. Geopolitics & Trade: China’s Xi returned from a rare North Korea trip, pledging expanded cooperation in trade and technology—an important backdrop for regional business planning.

AI Deal Surge: Nvidia and SK hynix signed a multi-year pact to advance next-gen AI memory for “AI factories,” with Nvidia also teaming up with SK Telecom on a gigawatt-scale AI data center plan (first site targeted for 2027) and expanding partnerships with Naver, LG, Hyundai and Doosan. Market Shock in Seoul: South Korea’s KOSPI slid about 8% amid an AI-led tech selloff tied to global rate fears and oil spikes, with chip heavyweights like Samsung and SK hynix hit hard before some stabilization abroad. North Korea Watch: Xi Jinping made a rare Pyongyang visit, pledging continued support for Kim Jong Un as ties with Russia deepen—raising questions about Beijing’s leverage. Crypto & Regulation: South Korean police raided Bithumb over alleged influence-peddling tied to lawmaker Kim Byung-gi’s son hiring. Trade Policy: The U.S. proposed broad Section 301 forced-labor tariffs (10%–12.5%) on imports from 60 economies, a move that could reshape supply-chain costs for partners including South Korea. Energy & Geopolitics: Oil jumped on Israel-Iran escalation, feeding into global risk sentiment and pressuring equities. M&A: DB Insurance agreed to buy U.S. specialty insurer Fortegra for about 2.5 trillion won, marking a major cross-border insurance consolidation.

AI Chip Deals & “AI Factories”: Nvidia CEO Jensen Huang’s Seoul tour kept the spotlight on scaling AI infrastructure, including a multi-year memory-chip agreement with SK Hynix and plans for gigawatt-scale “AI factories” with SK Group, LG, and SK Telecom. Market Shock From Iran-Israel Escalation: KOSPI plunged as tech sold off and oil jumped after renewed Iran-Israel strikes, feeding rate and inflation worries across Asia. Policy Push for Broader AI Growth: South Korea named Han Seong-sook as prime minister, with an explicit mandate to spread AI-driven gains beyond big tech and into SMEs. FX Volatility Watch: Seoul moved to steady the won after it slid to multi-year lows, warning against one-way speculation. Housing Overhaul: President Lee outlined a second-half housing policy push, including property holding tax reform aimed at unlocking supply and cooling jeonse/rental pressures. North Korea Sanctions-Busting: Reports say Pyongyang exceeded UN oil import caps and kept illegal mineral exports flowing, underlining ongoing regional security risk. Energy Supply Pressure: Rystad said West Asia conflict is tightening gas supplies in Northeast Asia, pushing higher coal utilization—pointing to rising coal imports for South Korea and Japan.

FX Shock: South Korea’s won slid to its weakest level in 17 years, pushing the dollar past 1,550 as foreign selling and Middle East-driven risk boosted demand for greenback assets; Finance Minister Koo Yun-cheol vowed “immediate” action against speculative FX trading and one-sided moves. AI Chips & Markets: Nvidia is set to deepen its Korea memory push, with SK Hynix tapped for Vera memory, a move that’s already sent SK Hynix shares surging and signals continued AI-driven demand despite a lingering global memory shortage. Semiconductor Alliance: Nvidia and SK are also preparing a new cooperation plan announcement, reflecting how chip supply constraints are turning into long-term partnerships. Energy Shipping: BGN ordered two dual-fuel LPG VLGCs from HD Hyundai Heavy Industries, adding to a growing fleet and keeping Korea shipbuilding in the LPG expansion lane. North Korea Watch: Kim Yo Jong reiterated Pyongyang’s nuclear stance as “absolutely non-negotiable” ahead of Xi Jinping’s rare visit to Pyongyang, underscoring the political backdrop for regional business risk. Trade & Policy: South Korea completed free-trade agreement negotiations with Serbia, setting up a future signing once procedures are done. Rural Energy Model: The government is expanding community-owned “solar income villages,” aiming to tie renewables to rural income and energy transition goals.

AI & Semiconductors: Nvidia CEO Jensen Huang is in Seoul for a packed push on AI and “physical AI,” meeting Korea’s top gaming leaders at PC bangs and signaling deeper robotics collaboration with Krafton and NCSoft. Telecom Infrastructure: LG Uplus laid out an AI data center plan targeting 5 trillion won in orders by 2030, with a Paju build strategy aimed at faster deployment and higher efficiency. Consumer Exports: South Korea’s cosmetics exports jumped to $5.6 billion in Jan–May, making beauty the top consumer export category as demand holds in Europe and the U.S. Markets & FX: The won briefly slipped past 1,560 per dollar amid foreign equity selling, while retail investors sold over $641 billion in overseas stocks in early June. Households & Rates: Expectations of a Bank of Korea rate hike are raising pressure on borrowers as mortgage and credit loan rates climb. Crypto Oversight: Bithumb’s erroneous bitcoin payout led to about $1.6 million in compensation, highlighting ongoing exchange operational risk. Politics & Economy: President Lee Jae Myung nominated Han Seong-sook as prime minister, framing her role around AI-led growth and support for SMEs. North Korea: Kim Yo Jong reiterated Pyongyang’s nuclear program is “absolutely non-negotiable” ahead of Xi Jinping’s rare visit. World Cup Business: FIFA says it will collect memorabilia after every 2026 match, while fans report ticket and cost pain ahead of the tournament.

Nvidia’s Seoul push: Jensen Huang arrived in South Korea promising “some surprises,” pitching robotics as the next major growth sector and meeting top business leaders, including a stop at T1’s gaming cafe and a scheduled appearance on tvN’s “You Quiz on the Block” on June 10. FX and markets: The won slid to a 17-year low as foreign investors sold stocks, with Seoul shares pressured by tech weakness amid broader AI-related jitters. AI profit-sharing pressure: South Korea’s labor minister urged tech firms to share excess AI profits with suppliers and staff, as regulators also look at AI-powered fraud prevention for 2026. Crypto rules shift: The government moved away from proposed mandatory crypto transfer reporting for large transactions. Local politics backdrop: Local elections are drawing intense attention, while President Lee warned against online misinformation tied to currency rumors. Corporate/industry tie-ins: Samsung SDI won a Volkswagen “Unified Cell” supply deal for a Hungary plant, extending Korean battery reach into Europe’s volume EV brands.

Won Under Pressure: South Korea’s won slid to a 17-year low as foreign investors kept dumping stocks, with the KOSPI down 5.54% and FX volatility fears back in focus. Nvidia’s Seoul Push: Nvidia CEO Jensen Huang met top Korean business leaders and highlighted robotics as the next big growth sector, while also courting AI and semiconductor partners during a high-profile visit. Tech Sell-Off Spillover: Global risk sentiment worsened after a Wall Street tech rout tied to AI valuation worries and rate-hike fears, adding pressure to regional markets. Robotics/AI Competition: China’s memory makers moved closer to IPOs, signaling tougher long-term competition for Samsung and SK hynix. Crypto Gambling Crackdown: South Korea police launched a criminal probe into Polymarket users over election-related bets, marking a rare enforcement step against individuals. Energy/Trade Context: With Middle East tensions weighing on oil and markets, South Korea’s broader economic outlook remains tightly linked to global rates and energy flows. Local Policy Watch: The justice ministry defended a plan to install air conditioning in prison corridors for vulnerable inmates, despite backlash over costs.

Semiconductor & Markets: Wall Street bounced Thursday as oil eased and bond yields cooled, but Friday’s mood turned as AI-linked chip stocks sold off hard, dragging the Nasdaq and semiconductor complex and raising fresh rate fears after a hot U.S. jobs report. South Korea FX & Flows: Seoul’s market and the won took pressure from foreign selling, with Korea’s currency sliding to multi-year lows amid risk-off sentiment. Nvidia in Seoul: Nvidia CEO Jensen Huang arrived promising “some surprises” and pitching robotics as South Korea’s next big growth sector, while also pushing the broader AI ecosystem with meetings across major tech firms. Samsung Global Capex: Samsung plans to invest up to $4B in a Vietnam chip-testing plant, targeting AI-driven memory demand and creating thousands of jobs. Energy & Shipping: South Korea won a Louisiana FLNG project worth about $4.8B, with Samsung Heavy Industries leading engineering and construction. Crypto Regulation: South Korea scrapped a plan for mandatory suspicious-transfer reports on crypto moves above 10 million won, easing compliance load for exchanges. Defense Trade: The U.S. approved a potential $106M sale of JDAM precision bombs and related gear to South Korea. Local Politics: South Korea’s ruling party won local elections overall, but defeats in key battlegrounds—plus a tight Seoul mayor race—cast a shadow.

AI Profit-Sharing Push: South Korea’s labor minister Kim Young-hoon urged tech giants to share excess AI windfalls with suppliers, subcontractors and workers, warning the AI chip boom could widen inequality and slow growth. Market Shock From Global Chips: Heavy foreign selling hit the Kospi, sending the won to a 17-year low after Broadcom’s AI outlook disappointed; Samsung and SK hynix slid sharply. Nvidia’s Korea Bet: Nvidia CEO Jensen Huang returned to Seoul, pitching robotics and “physical AI” as Korea’s next growth engine and meeting major firms including Hyundai, LG, SK hynix and Samsung. K-Beauty Expansion: KakaoStyle launched PIYONNA in France, promising 100% authentic products shipped directly from Korea and leveraging ZIGZAG’s brand network and Korean user reviews. China-North Korea Signal: Xi Jinping will visit Pyongyang next week, as North Korea unveiled a new facility tied to nuclear bomb fuel production, raising regional security stakes. Korea Housing Investment: Tishman Speyer secured a $300m first close for a Seoul rental-housing fund, targeting assets near transport hubs and universities. Venture & Data Deals: DataMasque raised $4m to expand data privacy software, while Korea Living Venture funding and other deal flow underscored continued investor appetite. Global Trade Tension: The US proposed forced-labor tariffs affecting South Korea and others, adding compliance risk for supply chains.

US Tariffs & Trade Talks: The U.S. says it will honor tariff caps in trade deals even as Trump pushes new forced-labor-linked duties that could hit South Korea and others. Global Markets: Wall Street climbed as oil eased, but AI stock weakness kept tech from leading the rally. Korea–US Security: A former U.S. diplomat argues OPCON transfer wouldn’t end the alliance if managed well. Korea–China Aviation: South Korea and China expand weekly flight rights for the first time in seven years, boosting both passenger and cargo capacity. Korea–AI & Chips: Nvidia’s Jensen Huang is deepening AI partnerships in Korea, while Samsung’s Vietnamese unit signs its first direct power purchase agreement. Business Expansion Abroad: South Korean supplier Kamtec Auto USA plans a $9.2m Auburn facility creating 50 jobs, and Texas backs Soulbrain RASA’s semiconductor-material plant. Labor & Rights: Korean hairstylists report exploitation tied to legal loopholes and freelancer classification. Crypto Infrastructure: Cosmos Labs buys Mintscan and sets up a Seoul subsidiary to unify Cosmos network operations. Retail & Tourism: Uniqlo’s return to Myeong-dong opens a large flagship store as foreign tourist numbers surge.

Local Elections Watch: South Korea’s ruling Democratic Party swept most local races but failed to flip Seoul; incumbent PPP mayor Oh Se-hoon narrowly held off DP challenger Chong Won-o, a key signal voters want a check on President Lee Jae-myung’s first-year agenda. Inflation Relief for SMEs: Seoul is expanding its “Good Price” program, adding more small shops that keep prices below local averages, with subsidies and practical support to help low-margin businesses absorb cost pressure. Drone Industrial Push: The government plans 2 trillion won ($1.3bn) in public-sector drone demand over five years to boost domestic makers and reduce reliance on imported parts. Nuclear Cooperation: Seoul and Washington assessed this week’s nuclear consultations as a success, focusing on nuclear-powered submarine cooperation and civil fuel-cycle capabilities. AI Hardware Momentum: Nvidia CEO Jensen Huang returns to Korea, underscoring South Korea’s role in AI memory and robotics supply chains; LG Group plans to adopt 10,000 Nvidia GPUs, while SK Hynix says investor feedback on a potential US listing has been “tremendously positive.” Energy & Geopolitics: Oil prices rose on Middle East uncertainty as US-Iran tensions simmer; South Korea’s won also faced pressure amid renewed risk. Defense Industry Shock: Authorities are probing a deadly blast at Hanwha Aerospace that killed five and injured two. Trade Policy Risk: The US floated broader forced-labor-linked tariffs that could hit major partners including South Korea, adding uncertainty for exporters. Capital Markets: SK Hynix’s US listing talks and Korea’s AI-led market strength keep investors focused on chip demand and supply constraints.

US Trade Shock: The U.S. Trade Representative proposed new Section 301 tariffs on imports from 60 economies over forced-labor enforcement failures, with rates of 10% for some partners and 12.5% for others—explicitly including South Korea—setting up fresh compliance pressure for Korean exporters ahead of a public comment period. Energy & Risk Mood: Markets slid as Iran conflict fears flared, while analysts warned oil could climb toward $150 if Strait of Hormuz disruption drags on—an input-cost risk for Korea’s import-heavy economy. Korea in the AI Security Push: Anthropic expanded access to its cybersecurity-focused Mythos model under Project Glasswing to about 150 organizations across 15+ countries, naming South Korean firms including Samsung, SK Hynix and SK Telecom. Industrial Accidents: South Korea probed deadly incidents at Hanwha Aerospace (five killed) and SK Hynix (toxic gas leak), underscoring ongoing workplace safety scrutiny for heavy industry and chips. Business Moves: Coupang jumped to No. 132 on the Fortune 500, citing AI-driven global fulfillment growth. Politics With Economic Spillover: South Korea’s ruling Democratic Party led in local elections, with ballot shortages in Seoul drawing criticism—another near-term signal for policy direction.

OECD Upgrade: The OECD lifted South Korea’s 2026 growth forecast to 2.6% from 1.7%, pointing to resilient chip exports powering the AI boom. Semiconductor Surge: May exports hit a record $87.8B (+53% y/y), with chip shipments up 169.4% to $37.2B, including DRAM and NAND gains. US Trade Pressure: Washington proposed new forced-labor tariffs under Section 301—10%+ for some partners and 12.5% for others—explicitly including South Korea among the higher-rate group. Security Talks: South Korea and the US held a second day of talks on nuclear cooperation and security agreements, with Seoul pushing for civilian uranium enrichment and spent-fuel reprocessing. AI Cybersecurity Push: Anthropic expanded Project Glasswing, extending access to its Claude Mythos cybersecurity model to about 150 more organizations across 15+ countries, including India and South Korea-linked partners. Market Mood: Oil rose on Middle East uncertainty while Asian stocks leaned on AI-related buying, keeping risk appetite supported even as trade-policy headlines added friction. Corporate Deal: DB Insurance completed its acquisition of Fortegra, aiming to expand specialty insurance reach across the US, Europe, the UK and Asia.

AI Chip Boom & Markets: Micron surged toward a rare $1T market-cap milestone as Nvidia’s push for high-bandwidth memory helped drive sold-out 2026 HBM demand, while investors also piled into Korea’s chip leaders as KOSPI hit record highs. Labor & Pay: Nvidia CEO Jensen Huang urged companies to pay workers “as much as possible,” as Samsung’s union bonus dispute remains a live flashpoint for Korea’s corporate governance and labor relations. Trade Policy Watch: U.S. Trade Representative Jamieson Greer said Section 301 investigation results—including for South Korea—will land in the coming weeks, with potential tariff proposals on the table. Corporate Moves: Samsung is relocating its U.S. headquarters from New Jersey to Plano, Texas, aiming to streamline decisions around its semiconductor footprint. Energy & Supply Chains: South Korea plans to boost Canadian crude and LNG imports and expand critical-minerals cooperation, signaling continued focus on energy security. Health Research: A National Health Insurance Service Ilsan Hospital study linked long-term opioid use to higher cardiovascular event risk in Korea. Defense/Industry: South Korea is probing a deadly Hanwha Aerospace plant blast, adding pressure to safety and oversight in defense manufacturing.