Samsung Electronics’ Vice Chairman is out of jail - and company headlines are out of the doldrums - as the South Korean company announced it will spend a whopping $22 billion over the next three years on artificial intelligence, auto components, 5G wireless technologies, and other future businesses. The strategy was mapped out on Wednesday August 8th under the restored leadership of Vice Chairman Lee Jae-yong after he was freed from prison in February.
While not all the funding will be directed at artificial intelligence projects, the sum is extraordinary compared to amounts spent on AI by other technology companies. Most high profile investments in artificial intelligence projects and acquisitions by companies like Apple, Amazon, and Microsoft have been in terms of tens or hundreds of millions of dollars, not billions.
The announcement also signals a rapid acceleration of Samsung’s involvement in AI technology. The company acquired AI startup Viv in October 2016 and then purchased fellow South Korean artificial intelligence company Fluenty in November 2017. But these were small blips on the radar compared to the rest of the technology industry. On a list released in January of technology companies that have spent the most acquiring AI-related technology, Samsung was not even in the top ten.
The number one investor, according to research firm RS Components, was Google, which has spent an estimated $3.9bn since 2006. By contrast, Samsung is promising to invest possibly up to five times that amount over a quarter of the time.
"Samsung expects innovations powered by AI technology will drive the industry's transformation, while the next-generation 5G telecommunications technology will create new opportunities in autonomous driving, the Internet of Things (IoT) and robotics," the company said in a statement.
According to AP, the sum will be used to hire researchers in about 1,000 artificial intelligence centres around the world, to ensure it will be a global player in next generation 5G telecoms technology, and to deepen its involvement in electronic components for future cars. Some of the money will will also be spent on South Korean biopharmaceutical businesses.
For South Korea, which has faced increasing concerns of economic slowdown in recent months, the announcement comes as welcome news. The country--Asia’s fourth largest economy--is especially reliant on big businesses for jobs and investment and lacks a pool of strong small and middle-sized businesses like those that exist in the US, Japan, or Germany.
Consequently, South Korea relies heavily on Samsung and its affiliated companies for investment and jobs, a reliance that is particularly problematic after a corruption scandal last year that resulted in Lee's conviction for bribery. Lee was freed after nearly a year in jail but former President Park Geun-hye and a close associate remain imprisoned on bribery and other charges.
Samsung expects its new investments will generate 20,000 new jobs over the next three years, in addition to 20,000 new jobs announced earlier.