South Korean officials proposed “AI profits distributed to all citizens,” and the South Korean stock index once dropped 5.1%.

South Korean senior officials have recently proposed an “AI dividend” concept, planning to use the excess profits of semiconductor companies such as Samsung Electronics and SK hynix to distribute payouts to the public and redistribute wealth. The remark triggered sharp turbulence in South Korea’s stock market, with the Korea Composite Stock Price Index (KOSPI) dropping as much as 5.1% at one point.

AI profits distributed to everyone? KOSPI falls more than 5% at one point

According to a report by Bloomberg, after Kim Yong-beom, head of the presidential office policy team, proposed the idea of distributing AI profits to the public, South Korea’s stock market saw violent swings on Tuesday. The Korea Composite Stock Price Index (KOSPI) plunged by as much as 5.1% intraday. Kim Yong-beom later stepped forward to clarify that the plan was intended to use “excess tax revenue” brought about by the AI boom, rather than imposing a brand-new “windfall tax” on corporate profits. Market risk-avoidance sentiment was thus able to ease, narrowing the market’s decline. Although implementation details remain unclear, it has already drawn intense attention from investors.

Samsung and SK hynix surge as global tech giants

With explosive global demand for high-bandwidth memory (HBM) chips, South Korea’s two leading chipmakers are seeing extraordinary profits. Samsung Electronics’ operating profit this year’s first quarter soared 48 times; the market expects its profitability to surpass Apple and Alphabet, making it the world’s second-largest technology company, behind Nvidia. SK hynix also is closely following—market estimates put its 2026 profit as high as 239 trillion South Korean won.

Labor-management tensions rise; Samsung union vows to strike to secure a 15% dividend

In addition to the government’s tax-reallocation plan, Samsung Electronics’ wage negotiations with its union have also entered the final stage. If no consensus is reached, the union has vowed to launch an 18-day strike starting May 21. Last month, tens of thousands of Samsung employees gathered outside the chip manufacturing complex, demanding that the company allocate 15% of operating profit as dividends for employees in the chip division. The employees also cited an example from rival SK hynix, which last year agreed to divert 10% of annual operating profit into a performance bonus pool, arguing that they should receive a more reasonable compensation return.

(Labor-management dividend deal falls apart! Samsung union is set to stage a major strike; JPMorgan: revenue could evaporate 4 trillion won)

South Korea’s economic transition: “technology monopoly,” policy set to focus on wealth redistribution

Kim Yong-beom warned that South Korea is shifting from a traditional export-led economy to a “technology monopoly economy” led by the semiconductor industry. While this is a core opportunity for South Korea’s development, it may also intensify social polarization. He suggested using the funds, provisionally labeled as “a national dividend,” to support youth entrepreneurship, basic income programs for rural farming and fishing communities, subsidies for artists, and strengthening elderly pensions. There are also voices within the ruling party calling for the prosperity of the semiconductor industry to be built on the sacrifices and endurance of farmers and fishermen, and that some portion of profits should be returned to rural communities as a necessary cost to maintain social stability and support the transition.

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