KOSPI Falls 2.3% After Proposal to Tax AI Profits

South Korea’s KOSPI index closed down about 2.3% after a presidential policy aide floated taxing profits from the AI sector to fund a citizen dividend. The index fell more than 5% at its low, hitting 7,421.71 before buyers limited the decline.

The proposal came from Kim Yong-beom, a presidential policy aide, who suggested returns generated by the AI industry should be partially shared with the public through a citizen dividend. Investors treated the comments as a potential levy on corporate profits and sold shares in the country’s largest firms.

Samsung Electronics and SK Hynix led losses. The two companies together account for nearly half of the KOSPI’s market capitalization, and declines in their shares pushed the index to the intraday low before some buying reduced the selloff. By the close the index had pared back some declines and finished roughly 2.3% lower.

Officials later clarified the citizen dividend would be funded by additional tax revenue generated by AI-driven economic growth rather than a direct levy on corporate profits. They did not define what would count as “excess tax revenue,” leaving uncertainty over how any measure would be structured.

Samsung produces high-bandwidth memory used in AI model training, and SK Hynix supplies most of the HBM chips used by Nvidia. Because those firms are large relative to the KOSPI, moves in their shares can have an outsized effect on the broader market.

JPMorgan had recently raised its KOSPI target ahead of the session. Foreign investors with exposure to Samsung and SK Hynix through ETFs or direct holdings experienced the intraday volatility.

Market participants said they will watch for detailed policy proposals or legislation that define revenue sources and tax mechanics before reassessing risk to Korean technology and semiconductor equities.