KOSPI Plunges... Foreign Media Cite Yongbum Kim's AI National Dividend Proposal as Cause

Foreign Media Cite Policy Confusion for Deteriorating Investor Sentiment
Yongbum Kim: "A Portion of Excess Profits in the AI Era Should Be Returned to the Public"

On May 12, the KOSPI experienced an intraday plunge of over 5%. Foreign media reported that the sharp decline was triggered by Yongbum Kim, policy chief at the Presidential Office, who proposed a discussion on a "national dividend."

Bloomberg reported on May 12 (local time) that "a senior Korean policymaker has proposed a plan to pay a 'dividend' to the public, funded by profits generated from the artificial intelligence (AI) industry," and noted that "this led to significant volatility in the Korean stock market."

Kim Yongbeom, policy chief at the Presidential Office. Photo by Yonhap News

The report continued, "A Facebook post by Yongbum Kim, policy chief at the Presidential Office, triggered the extreme volatility in the Korean stock market that day," adding, "investors became increasingly confused as they tried to interpret what specific policy the proposal entailed."

That day, the KOSPI opened at 7,953.41, up 131.17 points (1.68%) from the previous session, and at one point climbed to 7,999.67.

However, around 10 a.m., the index plunged sharply, dropping by 5.12% to 7,421.71. This occurred immediately after Kim posted his AI national dividend proposal on Facebook. The share prices of Samsung Electronics and SK hynix also reversed rapidly from gains to losses.

The stock price decline was led by foreign investors, who dumped large volumes of shares in Samsung Electronics and SK hynix, the two companies that had recently driven the market's rally, to realize profits.

Bloomberg analyzed, "Kim's remarks echo concerns among economists and politicians that the rise of AI could widen the gap between the haves and have-nots," adding, "In Korea, such concerns are manifesting as public calls for industry leaders to share more of the spoils from the global AI infrastructure boom."

However, Bloomberg also reported that "Kim clarified he was not proposing a new windfall tax on corporate profits, but rather suggesting the use of excess tax revenue generated by the AI boom, which helped the KOSPI recover a significant portion of its losses." The report added, "The share prices of Samsung Electronics and SK hynix also rebounded after the sharp drop."

Earlier, Kim argued in his post that the Korean economy could shift from its traditional cyclical export structure to one resembling a "technology monopoly economy." He also proposed a so-called "national dividend" concept, stating that it is necessary to redistribute the excess tax revenue generated by the AI infrastructure boom back to society.

He went on to say, "The key question in the AI era is not simply about growth rates, but about how to stabilize excess profits for the broader society," adding, "A portion of those gains should be structurally returned to all citizens. I would like to call this principle the so-called national dividend."

Meanwhile, the Presidential Office clarified that Kim Yongbum's "national dividend" proposal does not represent its official position. In a public notice issued that day, the Presidential Office stated, "The content posted by the policy chief on social media is his personal opinion and unrelated to any internal discussion or review within the Presidential Office."

This content was produced with the assistance of AI translation services.