AGP Executive Report

AI Finance Shock: Nvidia is reportedly in talks with OpenAI about a backstop of up to US$250B to help fund a massive AI data-centre plan, reviving fears of “circular” financing as markets digest the scale of AI spending. Market Volatility: The fallout hit South Korea hard: the KOSPI plunged more than 8% and triggered a circuit breaker, with Samsung and SK Hynix among the biggest losers as investors worried about financing risks and China’s chip competition. China Chip Pressure: Reports of China’s rapid semiconductor progress—including a blockbuster CXMT listing and moves toward advanced lithography—added fuel to the selloff, intensifying concerns for Korean memory makers. Regulator Watch on Retail ETFs: South Korea’s financial regulator said it may cap retail investment in single-stock leveraged ETFs if needed, after it raised deposit requirements to curb closing-time volatility. Tourism Crackdown: The government approved tougher penalties for overcharging in accommodation and restaurants for tourists, including longer suspensions for repeat violations. Trade Diplomacy: President Lee Jae Myung and Brazil’s Lula agreed the Korea–Mercosur trade pact should not be delayed further, as Lee pushes broader economic cooperation. Rural Economy via Food: McDonald’s Korea expanded a “Taste of Korea” partnership to spotlight locally grown Chungju waxy corn, aiming to support farmers amid rural shrinkage.

AI Datacenter Push: Nvidia plans to invest $1B in Naver to expand South Korea’s AI datacenter infrastructure, while Naver, Nvidia and Brookfield back a 200MW “AI factory” buildout—an effort that signals South Korea’s growing role in global AI compute. Semiconductor Deals: Samsung and SK Group are also locking in massive AI and chip partnerships with US tech firms, with Broadcom collaboration highlighted for memory and foundry work. Finance & Payments: KB Kookmin Bank is moving toward blockchain-based cross-border payments, and a separate push shows banks testing tokenized trade receivables with LG CNS. FX Crackdown: South Korea’s customs agency says it uncovered illegal foreign exchange transactions worth 7.2 trillion won in H1 2026, including crypto-linked export proceeds, as authorities try to curb currency volatility. Market Mood: KOSPI closed higher as investors piled into AI and robotics-linked bets, including KB’s new venture fund for tech startups. Trade/Logistics: DSV launched a weekly air cargo charter from Seoul to Chicago-Rockford, using the route to relieve pressure on larger hubs. Global Energy Backdrop: Oil prices slid after US-Iran paused strikes, easing sentiment for regional markets.

AI Infrastructure Deal: Naver surged more than 10% after Nvidia agreed to invest US$1 billion in newly issued Naver shares, boosting the plan to expand Naver’s Sejong AI data center to 200MW by 2028, with Brookfield expected to fund up to US$9 billion more. AI Policy & Enforcement: A new Omdia review says AI regulation will only work if governments can monitor and enforce rules, noting South Korea’s AI Basic Act allows fines for non-compliance. Semiconductor Mega-Contracts: Samsung and Broadcom expanded their AI chip partnership to exceed US$200 billion through 2030, covering memory, foundry work and advanced packaging. Markets & Oil: Stocks and sentiment improved as the US-Iran attack pause pushed oil down sharply, easing inflation worries ahead of central bank decisions and major earnings. Corporate Finance Tech: POSCO International and LG CNS tested tokenizing trade receivables on Injective to speed payments and settlement across subsidiaries. Politics Meets Business: Lee Jae-myung urged officials to keep oil price caps until uncertainty fades, while also pushing his “San Francisco AI Declaration” and follow-up diplomacy in Latin America. Aviation Supply Chain: SeAH Aerospace & Defense signed a long-term aluminum alloy supply deal with Airbus, aiming for production from 2028. Trade Talks: South Korea moved into the final stage of CEPA negotiations with Bangladesh, targeting resolution across goods, services, digital trade and investment.

AI Infrastructure Deal Surge: South Korea’s AI push is getting bigger fast. NAVER, NVIDIA and Brookfield say they’ll expand NAVER’s NVIDIA DSX AI factory at the GAK Sejong site to 200MW by 2028 (from 55MW), with a $10bn financing package led by NVIDIA’s $1bn and Brookfield’s up to $9bn. Semiconductor Supply Chain: At a San Francisco summit, President Lee Jae-myung unveiled a “San Francisco AI Declaration” and announced $950bn in AI-related chip and infrastructure deals involving Samsung Electronics and SK Group, including SK hynix’s Nvidia partnership and Samsung’s Broadcom MoU. Market Mood: Naver shares fell nearly 6% in Seoul on dilution worries tied to the deal’s funding structure. Trade Policy Shock: The US rolled out forced-labor tariffs on imports from 60 economies, with South Korea included under existing trade terms—raising uncertainty for exporters and supply chains. Cross-Border Payments: KB Kookmin Bank plans a Kinexys-based blockchain cross-border payment service for import/export firms, starting with US dollar transfers across 10 countries in August. Labor & Corporate Governance: SK Telecom shares jumped after Chey Tae-won was ordered to pay a record 944bn won divorce settlement, spotlighting how conglomerate cash flows could shift.

AI Deal Push: South Korea’s President Lee Jae Myung used a San Francisco summit to lock in massive AI cooperation, with Samsung and SK Group tying up with US tech giants on chip supply, data centers and next-gen infrastructure—deals totaling about $950B and including a $500B-plus Nvidia–SK Group initiative. Semiconductor Partnerships: Samsung and Broadcom expanded their AI chip pact through 2030, targeting over $200B in cooperation across memory, foundry and advanced packaging. Market Flows: Pension funds (including the NPS) turned net buyers of KOSPI stocks in July for the first time in 2026, led by heavy buying of SK hynix. Earnings Watch: SK hynix is expected to post a record 64.1T won operating profit in Q2, powered by HBM demand for AI data centers. Homeownership Gap: New data shows homeownership among Koreans under 40 hit a record low, with only 27.7% owning homes in 2025. Crypto & Finance: Upbit plans to list Morpho and Euler in KRW markets, signaling growing appetite for DeFi lending. US Tariffs Risk: The US rolled out new 10%–12.5% tariffs on imports from nearly 60 partners, including South Korea, raising trade uncertainty for exporters. Global Business Diplomacy: Lee also argued Seoul–Washington ties should go beyond security into technology, innovation and startups.

AI Chip Deals: Samsung Electronics and SK hynix locked in a combined $950B AI chip supply push with US tech giants during President Lee Jae-myung’s San Francisco trip—SK hynix to supply $750B in memory chips and Samsung to sign a $200B Broadcom MoU covering advanced memory, foundry and packaging through 2030. AI Infrastructure Buildout: Nvidia also pledged $1B to Naver to expand an AI data center from 55MW to 200MW, with Brookfield as capital partner up to $9B, while Nvidia and SK Group unveiled a $500B+ AI and semiconductor partnership tied to SK Telecom’s planned 2GW AI factory. Sovereign AI Factory Expansion: Naver, Brookfield and Nvidia said the “AI factory” buildout will scale Korea’s compute access for model and agent development, positioning the country as an AI hub. Tech Sector Spillover: The deals underline how memory and advanced packaging capacity are becoming the bottleneck for AI accelerators—meaning suppliers outside the locked-in supply chain face longer waits. Global Trade Pressure: Separate from Korea’s tech push, the US rolled out forced-labor tariffs affecting multiple countries, adding uncertainty to global supply chains.

AI Summit: South Korea President Lee Jae-myung hosted an AI summit in San Francisco and unveiled a “San Francisco AI Declaration,” pitching Seoul as a global AI hub built on its chip and data-center strengths, with meetings with Nvidia, OpenAI, Anthropic and Broadcom. Nvidia Deal: Nvidia CEO Jensen Huang said the company will announce a $500 billion partnership with SK Group and expand cooperation with SK hynix and Samsung, plus work with KAIST on a “Korea AI.” Crypto Takeover: Mirae Asset completed its acquisition of Korbit, rebranding it as “Digital X,” positioning the exchange for institutional-grade digital asset services. Divorce Shock for SK: A South Korean court ordered SK Group Chairman Chey Tae-won to pay about 944 billion won ($644m) in a record divorce settlement, with analysts saying it’s unlikely to change control but may force asset sales or collateral. US Tariff Wall Hits Allies: The US imposed new 10%–12.5% forced-labor tariffs on 60 trading partners, including South Korea, replacing a temporary levy as trade partners push back legally and politically. Energy & Industry: CGN began commercial operations at its Daesan Phase II gas plant in South Korea, while Seoul and Washington opened a joint shipbuilding cooperation center to advance the $150bn MASGA push. UNESCO Heritage: UNESCO added Sebastia in the West Bank and Lebanese castles to the World Heritage List, including endangered designations, despite Israeli objections.

US Tariffs Shock Trade Partners: The US has restarted a tariff floor after a Supreme Court setback, imposing 10%–12.5% forced-labor duties on imports from 60 economies, with South Korea among those on the list—sparking pushback from Seoul and others over the basis for the claims. Chip Deals on the Way: During President Lee Jae-myung’s Silicon Valley trip, Samsung Electronics and SK hynix are set to announce “very large” long-term memory supply deals with US tech firms, alongside AI data-center investment plans. AI Boom, Jobs Concern: South Korea’s growth story is increasingly tied to chip profits, but the government is trying to turn AI investment into broader economic gains as critics warn about “growth without jobs.” Divorce of the Century Hits SK Group: A Seoul High Court ordered SK Group Chairman Chey Tae-won to pay 944 billion won (about $644m) to his ex-wife, revising an earlier larger payout and raising questions about whether shares may need to be sold or pledged. Market Stress From Leverage: Margin loan balances fell to 32.75 trillion won, the lowest in months, as investors pull back on leveraged bets amid volatility. Power Export Surge: South Korea’s power cable and transformer exports topped 1 trillion won in H1 for the first time, boosted by AI-driven data-center demand and grid upgrades.

US Tariffs Shock Trade Outlook: The U.S. will impose forced-labor tariffs of 10% to 12.5% on 60 trading partners starting Friday, with South Korea among those facing 12.5% under Section 301—just as a temporary 10% global duty expires. Seoul-US Tariff Cap Talks: Cheong Wa Dae says it will keep consulting Washington to ensure the Korea-U.S. 15% tariff cap from last year’s deal is respected, amid concern that combined duties could push rates higher. FX Watchlist Pressure: The U.S. Treasury kept South Korea on its currency monitoring list, citing won weakness despite strong fundamentals and a large current account surplus. Market Mood Turns Risk-Off: Seoul stocks fell sharply late Friday morning as Middle East tensions lifted oil above $100 and investors sold tech, finance and automakers; KOSPI dropped nearly 5%. Privacy Crackdown: Korea’s privacy watchdog fined TikTok 10.3 billion won for unlawful behavioral data use for ads, and also ordered corrective steps and fines tied to Siri recordings. Shipbuilding Push: South Korea and the U.S. opened a shipbuilding partnership center in Washington under MASGA, with Seoul pledging support for U.S. shipyard investment and regulatory help. Consumer Price Plan: Korea’s finance minister said the government will step up inflation-fighting measures next month as Middle East-driven oil volatility threatens supply chains. Corporate Earnings: Hyundai Mobis Q2 net rose 13.5% on high-end parts and a weaker won; Samsung Heavy Industries said it will broaden U.S. shipbuilding cooperation. Tech Product Moves: Samsung expanded its Galaxy foldable lineup, shifting emphasis toward media and user experience.

AI Infrastructure Push: SK Telecom launched SK Hyper, a new unit to execute its AI data center buildout, committing about $510M (750bn won) by 2030 and targeting 15GW of capacity by 2035, with early sites in Ulsan and multiple regions. Markets & Energy Shock: Oil surged as Brent briefly topped $100 on renewed Middle East risks tied to Red Sea attacks, dragging global stocks and adding inflation pressure. Crypto & Finance Moves: Mirae Asset completed its Korbit acquisition and rebranded it as “Digital X,” signaling deeper push into digital-asset services. Regulatory Watch: South Korea’s privacy regulator fined TikTok about $7M (10.3bn won) for collecting user behavioral data for ads without proper consent. Banking Update: Shinhan Financial reported Q2 net income of about $1.21B, with revenue above forecasts. Geopolitics at ASEAN: North Korea skipped the ASEAN Regional Forum for a second straight year, while Japan pledged energy-security and anti-scam cooperation with ASEAN-plus-three partners including South Korea. Corporate/Legal Spotlight: A Michelin-starred Seoul restaurant’s ant-topped sorbet case moved forward after prosecutors alleged violations of food rules on edible insects.

South Korea Growth Watch: The Bank of Korea says Q2 GDP rose 0.6% quarter-on-quarter, beating forecasts as a semiconductor export boom offset a dip in construction investment, keeping the AI-chip engine in focus for further rate hikes. Markets & Oil: Asian stocks climbed as U.S. tech spending signals support for chip demand, but Middle East tensions pushed Brent to six-week highs, reviving inflation and rate worries. Corporate Earnings: Samsung Biologics reported Q2 net profit up 29.1% on full-capacity operations and a weak won, while Seoul shares also tracked a tech-led rally after Alphabet’s AI-driven capex outlook. Labor Pressure: Bonus demands tied to AI profits spread beyond chipmakers, with unions across Hyundai, HD Hyundai Heavy Industries, LG Uplus and others pushing for larger payouts. Housing Politics: The Blue House moved to contain backlash over President Lee Jae-myung’s Bundang apartment sale and collateral mortgage setup, as housing reform momentum faces a trust test. Diplomacy & Security: ASEAN Regional Forum talks in Manila put Middle East conflict and Strait of Hormuz risks front and center, with North Korea expected to skip the meeting again. Trade & Investment: South Korea’s industry minister heads to Washington to advance U.S. investment projects, with energy flagged as the likely first target and the Coupang dispute still on the agenda. Business Tech: Samsung’s new Galaxy Watch lineup leans hard into AI health features, while Samsung’s robotics push and broader AI infrastructure bets keep feeding the corporate narrative.

Samsung & AI Investment: Samsung is reportedly in talks to invest about €1bn in French AI startup Mistral, as fundraising discussions value the company around €20bn—another sign of Korea’s push for “sovereign AI” amid European efforts to reduce US tech dependence. Samsung Mobile Launch: Samsung unveiled the Galaxy Z Fold8 “passport-sized” foldable plus Galaxy Z Fold8 Ultra and Galaxy Z Flip8, raising prices as memory chip costs bite, while also rolling out new Galaxy Watch models focused on health monitoring. Markets & Energy Risk: Oil jumped above $94 on renewed US-Iran strikes, lifting inflation worries and dragging sentiment as Asia markets gave up earlier gains. Security & Trade: South Korea, the US and Japan reaffirmed deterrence and denuclearization coordination on North Korea at ministerial talks in Manila. Crypto & Regulation: South Korea’s crypto trading volume reportedly fell sharply as retail investors rotated toward stocks, while regulators continue tightening oversight. Local Governance: Seoul Mayor Oh Se-hoon was convicted over campaign finance crimes, setting up a potential ouster and a Supreme Court test. Insurance Watch: AM Best kept a stable outlook for South Korea’s non-life insurers, citing improving capital rules and investment income offsetting weaker underwriting.

Semiconductor rebound & market mood: Seoul stocks surged after chip gains, with the KOSPI jumping nearly 6% at the open as investors looked ahead to big-tech earnings and AI spending signals. Energy risk watch: South Korea’s finance minister urged vigilance over Middle East-driven energy supply disruptions, citing stable oil and naphtha stockpiles but warning uncertainty remains high. Trade pressure from Washington: Seoul’s industry minister heads to the U.S. as a Section 301 decision looms; the bigger worry is preserving the 15% tariff ceiling amid potential forced-labor and overcapacity duties. FX stabilization push: The finance ministry asked major exporters to proactively convert export proceeds into won and bring back overseas retained funds as the won steadied. Petrochem restructuring: Government approved a Yeosu complex plan to idle ethylene capacity over three years and reshape assets to improve margins. Biopharma supply chain: MOHW and Novartis signed a ~140B won deal to build a radioligand therapy ecosystem, expanding manufacturing and hospital capacity. Corporate ownership move: BlackRock lifted its stake in Korea Aerospace Industries to 5.02%, valuing the holding at about 700B won. Robotics & display industry signals: LG Display showcased next-gen OLED and humanoid-robot display concepts at K-Display 2026, while Samsung’s Galaxy Unpacked event in London ramps up foldable expectations.

ASEAN Diplomacy: South Korea’s Foreign Minister Cho Hyun is set to travel to the Philippines for a three-day ASEAN-focused schedule, aiming to deepen cooperation on energy, economic security, AI, and online scam-crime efforts, while also seeking support for peace on the Korean Peninsula and dialogue with North Korea. Markets & Semis Mood: Seoul stocks erased early losses and climbed late Tuesday morning as bargain hunters returned to tech heavyweights; Samsung and SK hynix led the rebound, with the won easing slightly. Geopolitics & Energy Watch: Seoul’s industry ministry said crude oil supply is stable for July–September despite Middle East tensions, while shipping risk remains a live concern as the Strait of Hormuz and Red Sea routes face renewed threats. Crypto & Policy: Reports say South Korea’s CBDC pilot has been scaled up, while separate coverage highlights the government’s push to tighten rules around crypto and prediction-market-style wagers. Retail Restructuring: Homeplus won a court reprieve after securing a 200 billion won emergency loan, extending creditor voting deadlines in its rehabilitation process. Corporate/Industry Deals: SK pharmteco and Genethon detailed progress on a French viral-vector manufacturing partnership for a DMD gene therapy, positioning for future commercial-scale supply. Sports Business: LIV Golf faces another shake-up as the PGA Tour and DP World Tour form an alliance with the Asian Tour through 2029, potentially reshaping LIV’s access and funding outlook.

Brokerage Earnings Outlook: Despite worries about single-stock leveraged ETFs, major South Korean securities firms are still expected to post strong Q2 results, with analysts pointing to higher trading volumes and valuation gains; FnGuide forecasts combined operating profit for five firms at roughly 4.3–5.0 trillion won. Labor & Corporate Governance: Kakao union members plan a lunch-hour picket over a two-month wage dispute, demanding incentives tied to operating profit while management rejects the proposed burden. Retail Real Estate Expansion: Shinsegae Group will launch a US$500 million joint venture with OKO Group to develop luxury hotels and branded residences across Asia and North America. Regional Industrial Policy: The finance ministry plans to give extra advantages in state contract bidding to firms outside the Seoul metro area, including priority for regions with population decline and higher sole-source ceilings for R&D equipment. AI-Driven Trade Momentum: Exports rose 52.3% in the first 20 days of July, led by semiconductors (+180%), keeping the trade surplus at $12.2 billion. Auto Tech Push: Hyundai Motor Group will roll out a global vehicle-to-everything (V2X) service branded “All Day Energy,” starting in Britain. Market Mood: Seoul stocks opened higher then slipped as bargain-hunting cooled amid Middle East tensions. Robotics Strategy: Samsung Electronics will create a robotics division reporting directly to the CEO to accelerate commercialization. Energy/Climate Policy Abroad: China unveiled a 2026–2030 plan to cut emissions and expand clean energy, targeting nine high-emission industries.

Banking & Markets: South Korea’s KOSPI slid about 4.5% as AI-linked stocks were sold off again, with investors also reacting to renewed US-Iran tensions that pushed oil back above $90 a barrel and kept rate worries alive. Central Banking & Fintech: The Bank of Korea plans to expand its second phase of the CBDC pilot, Project Hangang, adding two more banks (to nine total) and raising wallet limits for live deposit-token testing starting in September. Crypto Regulation: South Korea’s tax investigators are urging a legal fix to let authorities seize self-custodied crypto properly, warning that current rules leave a loophole after warrants. Corporate Moves: Blackstone is investing in South Korea’s robotics supplier Futronic in a deal valued around $676M, betting on the robotics boom. Semiconductors & Investment Sentiment: A city delegation from West Lafayette toured SK hynix sites ahead of a planned $3.87B advanced packaging plant, highlighting safety practices and local partnership plans. Culture & Consumer Attention: Psy’s “Gangnam Style” topped 6 billion YouTube views, reinforcing the global pull of Korean content.