South Korea is making a significant push to become a global leader in artificial intelligence, with President Lee Jae Myung proposing a record 728 trillion won ($506 billion) budget for 2026. This plan, unveiled on November 4, 2025, includes tripling AI spending to 10.1 trillion won ($6.9 billion to $7 billion), focusing on integrating AI into key industries like semiconductors, automobiles, and robotics. A substantial part of this initiative involves Nvidia supplying 260,000 GPUs to the South Korean government and major companies, though comments from US President Donald Trump regarding chip access introduce some uncertainty. The budget also allocates an 8.2% increase in defense spending, reaching 66.3 trillion won ($46 billion), to modernize the military and reduce reliance on the US. This comes as South Korea already boasts the world's fifth most powerful military, spending 1.4 times North Korea's annual GDP on defense. Simultaneously, a complex financial dynamic, dubbed the 'trillion-dollar AI loop,' is emerging among tech giants. Companies like Nvidia, OpenAI, Microsoft, Oracle, and AMD are engaging in a self-reinforcing economy where investments are followed by product purchases from the investor. Nvidia's GPUs are central to this, exemplified by OpenAI's $100 billion deal for millions of Nvidia chips and Oracle's $300 billion cloud deal with OpenAI, which includes Oracle buying $40 billion in Nvidia chips. Critics, however, warn this 'AI money-go-round' could inflate valuations and risk a new tech bubble. The demand for AI hardware is immense, with OpenAI and Amazon Web Services signing a $38 billion multi-year deal for Nvidia's advanced GB200 and GB300 GPUs. However, this demand highlights a critical bottleneck: a severe lack of data centers with sufficient power and cooling, or 'warm shells.' Microsoft CEO Satya Nadella notes that infrastructure, not chips, is the primary constraint, as the US power grid is strained, and data center electricity use could soon rival Japan's. To address these limitations, Nvidia H100 GPUs are even being tested in space on Starcloud-1 for orbital data centers, which could leverage solar energy and reduce land and water usage. In other developments, Meta is facing a lawsuit from adult film companies Strike 3 Holdings and Counterlife Media, which allege the company illegally downloaded thousands of porn videos to train its AI models. Meta denies these claims, stating any small number of downloads were for 'private personal use' and not for large AI datasets, and that its AI models are prevented from creating such content. The broader economic impact of AI is also under scrutiny, with Evercore ISI strategist Julian Emanuel suggesting AI is driving a 'jobless profit boom' by replacing human workers, particularly in the tech sector. This trend could lead to permanent job losses, wealth concentration, and increased inequality. Meanwhile, efforts are underway to make AI more sustainable. Thermodynamic computing, a new method inspired by nature, promises to drastically reduce energy consumption by using probabilistic bits (PITS). Companies like Extropic are developing specialized processors, such as the Z1 TSU chip with 4 million PITS, showing potential for up to 10,000 times energy savings in machine learning. On the application front, Cognizant announced on November 4, 2025, its adoption of Anthropic's large language model, Claude, for its enterprise clients and internal teams, aiming to accelerate AI adoption and improve workflows for up to 350,000 associates. Anthropic, having recently raised $13 billion, has also partnered with IBM and Amazon Web Services. Also on November 4, 2025, Arctic Wolf revealed plans to enhance its Aurora Endpoint Security with AI-powered ransomware prevention and rollback features, leveraging acquired technology from UpSight Security to predict and stop ransomware attacks. In a strategic shift, AI model company Zyphra is moving its entire training cluster to AMD hardware, citing strong performance from AMD's MI300X GPUs for memory-bound operations, potentially outperforming Nvidia H100s, as they develop efficient models like Zamba 2 for edge devices. However, the rapid deployment of AI also brings risks; AI web browsers, while helpful, are deemed highly untrustworthy due to increased security vulnerabilities like prompt injection, which can expose sensitive data. Experts warn these browsers are being rushed to market with potential flaws. In the UK, creative groups failed to establish a legal precedent in a copyright case involving Getty Images and artificial intelligence, leaving specific rulings on AI copyright in that jurisdiction unaddressed.
Key Takeaways
- South Korea plans to triple its AI spending to 10.1 trillion won ($6.9 billion) for 2026 as part of a record 728 trillion won ($506 billion) budget, aiming to become a top three AI power.
- Nvidia will supply 260,000 GPUs to the South Korean government and major companies, supporting the nation's AI initiatives.
- A 'trillion-dollar AI loop' involves tech giants like Nvidia, OpenAI, Microsoft, Oracle, and AMD investing in each other, then buying products from their investors, raising concerns about inflated valuations.
- OpenAI and Amazon Web Services signed a $38 billion multi-year deal for Nvidia's advanced GB200 and GB300 GPUs, highlighting massive demand for AI hardware.
- The lack of data centers with sufficient power and cooling is a major bottleneck for AI development, leading to tests of Nvidia H100 GPUs in space for orbital data centers.
- Meta faces a lawsuit from adult film companies alleging illegal downloading of porn videos for AI training, which Meta denies, stating any downloads were for 'private personal use' and not for AI datasets.
- A 'jobless profit boom' is predicted due to AI replacing human workers, potentially leading to permanent job losses and increased wealth concentration.
- Thermodynamic computing, using probabilistic bits (PITS) and specialized processors like Extropic's Z1 TSU chip, promises up to 10,000 times energy savings for AI, addressing the energy crisis.
- Cognizant is adopting Anthropic's Claude large language model for its enterprise clients and up to 350,000 associates to modernize and scale AI adoption and speed up workflows.
- Zyphra is strategically shifting its entire AI training cluster to AMD hardware, noting that AMD's MI300X GPUs offer strong performance for memory-bound operations, potentially outperforming Nvidia H100s.
South Korea boosts AI and defense spending
South Korean President Lee Jae Myung proposed a record 728 trillion won ($506 billion) budget for 2026 on November 4, 2025. This budget includes tripling AI spending to 10.1 trillion won ($6.9 billion) to make South Korea a global AI leader. The plan focuses on industries like semiconductors, automobiles, shipbuilding, and robotics. He also called for an 8.2% increase in defense spending to 66.3 trillion won ($46 billion) to modernize the military and reduce reliance on the US. Lee highlighted a deal for Nvidia to supply 260,000 GPUs to the government and major companies, though US President Donald Trump's comments on chip access raise some questions.
President Lee seeks support for AI focused budget
On November 4, 2025, President Lee Jae Myung presented a 728 trillion won ($506 billion) budget plan for 2026, calling it "Korea's first budget to open the AI era." He proposed tripling AI spending to 10.1 trillion won to accelerate the nation's shift to an AI-driven economy. The budget includes 2.6 trillion won for AI across industrial and public sectors, and 7.5 trillion won for talent development and infrastructure. Lee also plans to increase national defense spending by 8.2% to 66.3 trillion won, aiming to foster the defense industry as a key growth sector. He emphasized that AI transition is vital for national survival and will also expand welfare programs.
South Korea plans huge AI and defense boost
On November 4, 2025, South Korean President Lee Jae Myung unveiled a plan to triple AI investment to 10.1 trillion won (about $7 billion) for 2026. This is part of a record 728 trillion won ($506 billion) government budget, aiming to make South Korea a top three AI power. The plan focuses on integrating AI into industries like semiconductors and robotics, with 2.6 trillion won for AI adoption and 7.5 trillion won for talent and infrastructure. The budget also includes an 8.2% increase in defense spending to 66.3 trillion won ($46 billion). Nvidia will supply 260,000 GPUs to South Korea, though US President Trump's comments on chip access and the need for data centers create some uncertainty.
South Korea triples AI and defense spending
South Korean President Lee Jae Myung announced plans to triple the country's spending on artificial intelligence. He also proposed the biggest defense budget increase in six years. Lee noted that South Korea already spends 1.4 times North Korea's annual GDP on defense and ranks as the world's fifth most powerful military.
Tech giants create AI money loop
A "trillion-dollar AI loop" involves tech giants like Nvidia, OpenAI, Microsoft, Oracle, and AMD trading with each other. Companies invest in one another, then the invested company buys products from its investor, creating a self-reinforcing economy. Nvidia is central, with its GPUs being crucial for AI models. For example, OpenAI's $100 billion deal with Nvidia requires buying millions of chips, and Oracle's $300 billion cloud deal with OpenAI involves Oracle buying $40 billion in Nvidia chips. Critics warn this "AI money-go-round" could inflate valuations without real demand, risking a new tech bubble.
Nvidia's AI deals face power and space challenges
OpenAI and Amazon Web Services signed a $38 billion multi-year deal for Nvidia's advanced GB200 and GB300 GPUs. This highlights the huge demand for AI hardware, but also reveals a major problem: a lack of "warm shells" or data centers with enough power and cooling. Microsoft CEO Satya Nadella noted that the bottleneck is not chips, but infrastructure. The US power grid is strained, and data center electricity use could soon equal Japan's. To overcome these limits, Nvidia H100 GPUs were launched into space on Starcloud-1 to test orbital data centers, which could use solar energy and reduce land and water needs.
Meta denies using porn for AI training
Meta faces a lawsuit from adult film companies Strike 3 Holdings and Counterlife Media. The companies claim Meta illegally downloaded thousands of porn videos to train its AI models. Meta denies these accusations, stating that a small number of downloads were for "private personal use" and not for large AI datasets. Meta also said its terms of service prevent its AI models from creating pornographic content and that it actively avoids training on such material. The lawsuit also mentioned downloads from a Meta contractor's father's home IP address, which Meta also denies connecting to its operations.
AI creates jobless profit boom
Julian Emanuel, a strategist at Evercore ISI, believes artificial intelligence is causing a "jobless profit boom." He suggests AI is replacing human workers, especially in the tech sector, leading to companies making more money without hiring more people. This trend could lead to a permanent loss of jobs and concentrate wealth among fewer companies and individuals. Emanuel warns this shift could worsen inequalities and affect consumer spending and economic growth. He stresses the need for new education programs and social safety nets to address these challenges.
Thermodynamic computing promises energy efficient AI
Thermodynamic computing offers a sustainable future for artificial intelligence by drastically reducing energy consumption. This new method, inspired by nature, uses probabilistic bits (PITS) instead of traditional binary states, allowing for more energy-efficient calculations. Companies like Extropic are developing specialized processors called Thermodynamic Sampling Units (TSUs), such as the Z1 TSU chip with 4 million PITS. Prototypes show potential for up to 10,000 times energy savings in machine learning, addressing the growing energy crisis caused by current AI models. This approach aims to make AI innovation and sustainability coexist.
AI web browsers are helpful but unsafe
AI web browsers, while helpful, are highly untrustworthy due to vastly increased security risks. Their ability to interact deeply with web pages makes them vulnerable to hidden attacks like prompt injection. Malicious commands can be embedded in invisible text or images, leading to exposure of sensitive data or unwanted actions without user interaction. These browsers also store user interactions and data, raising significant privacy concerns. Experts warn that AI browsers are being rushed to market with potential security flaws, making them too dangerous for current use.
Getty AI copyright case lacks UK precedent
Creative groups in the UK failed to establish a legal precedent in a copyright case involving Getty Images and artificial intelligence. The outcome means that a specific ruling on AI copyright, as it relates to Getty's practices, was not secured in the UK courts.
Cognizant uses Anthropic AI for clients
On November 4, 2025, Cognizant announced it is adopting Anthropic's large language model, Claude, for its enterprise clients and internal teams. Cognizant will use Claude to help clients modernize and scale AI adoption and provide it to up to 350,000 associates to speed up coding, testing, and other workflows. This partnership aims to integrate AI with existing data and applications, using Anthropic's Claude, Claude Code, Monitoring and Control Platform, and Agent Framework. Anthropic recently raised $13 billion in funding and has also partnered with IBM and Amazon Web Services to expand its enterprise AI solutions.
Arctic Wolf boosts Aurora security with AI
On November 4, 2025, Arctic Wolf announced plans to enhance its Aurora Endpoint Security with new AI-powered ransomware prevention and rollback features. This advancement comes from acquiring UpSight Security and its patented technology. The Aurora Platform will use predictive AI models on devices to analyze billions of events, stopping ransomware before it can encrypt data or steal information. These new capabilities will also quickly isolate compromised systems and restore them using rollback recovery. Arctic Wolf aims to redefine endpoint protection, offering faster and more precise detection, containment, and recovery from cyberattacks.
Zyphra shifts to AMD for AI innovation
Zyphra, an AI model company, has made a strategic move to use AMD hardware for its entire training cluster, aiming to reduce operational costs. Quentin Anthony, Zyphra's Head of Model Training, noted that AMD's MI300X GPUs offer strong performance for certain tasks, like memory-bound operations, potentially outperforming Nvidia H100s. Zyphra uses a "bottom-up" approach, deeply understanding hardware to design efficient algorithms, and develops innovative models like Zamba 2, which matches Llama 3 8B performance. These models are optimized for edge devices, from phones to desktops, supporting Zyphra's vision for widespread AI.
Sources
- South Korean president calls for aggressive AI spending in budget speech
- Lee calls for bipartisan support for 2026 budget centered on AI push
- South Korea Unveils $7 Billion AI Investment Plan
- South Korea to triple AI spending, boost defence budget
- The trillion-dollar AI loop: how tech giants are trading with themselves
- Nvidia’s $38B AI Deal, Space Data Centers, and Power Crunch: The Realities Behind the GPU Boom
- Meta Says Porn Stash was for 'Personal Use,' Not Training AI Models
- A ‘jobless profit boom’ has cemented a permanent loss in payrolls as AI displaces labor at a faster rate, strategist says
- Why Thermodynamic Computing Could Be the Future of Artificial Intelligence
- AI web browsers are cool, helpful, and utterly untrustworthy
- Creative groups fail to secure UK legal precedent in Getty AI copyright case
- Cognizant Adopts Anthropic’s AI Models for Enterprise Clients and Internal Teams
- Arctic Wolf Invests to Advance Aurora Endpoint Security with AI-Powered Ransomware Prevention and Rollback Capabilities
- Zyphra’s AMD Offensive: A Masterclass in Hardware-Aware AI Innovation
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