Introduction
South Korea wants to spend big on AI.
President Lee Jae Myung shared a new budget plan on Monday, November 2.
The plan is for 2027.
It is the largest budget in the country’s history.
It puts huge money into AI, chips, and data centres.
It also funds a home-grown AI model.
A sovereign AI model means a model made and controlled in its own country.
What Happened
Total spending would rise 12.8% to 820.9 trillion won.
Won is the money of South Korea.
That total is about $610 billion.
AI, chips, physical AI, and data centres would get 21.3 trillion won.
That is about $16 billion.
It is nearly double the 2026 level.
Physical AI means smart machines that work in the real world.
Think robots and self-driving machines.
A separate 4.7 trillion won would go to frontier AI projects.
Frontier means the most advanced work.
That includes South Korea’s own AI model.
The goal is the world’s highest performance.
Defence spending would rise 8.2% to 73.3 trillion won.
The plan must still pass the National Assembly.
The National Assembly is South Korea’s parliament.
Its deadline is December 2.
Key figures
Total 2027 budget plan: 820.9 trillion won, about $610 billion
Rise from 2026: 12.8%
AI, chips, physical AI and data centres: 21.3 trillion won, about $16 billion
2026 level for those areas: 10.8 trillion won
Frontier AI and home-grown model: 4.7 trillion won
Defence spending: 73.3 trillion won, up 8.2%
Parliament deadline: December 2, 2026
Why It Happened
South Korea is riding a chip boom.
Chips are tiny parts that run computers and phones.
Strong chip sales brought in more tax money.
The government wants to use that money for future growth.
It wants to train 2,000 chip design experts too.
It wants to build chip factories and data centres.
It also wants its own AI model.
Right now, the best models come from a few firms abroad.
South Korea wants more control over its own AI.
That is the idea behind a sovereign model.
Why It Matters
This plan is a bet on the future.
It bets that AI and chips will drive growth for years.
It also bets that public money can speed that growth.
But a budget plan is not yet a law.
Parliament can change it.
It can cut some projects.
It can add others.
The money is also huge.
Critics will ask if it is spent well.
They will ask if buying foreign AI would be cheaper.
Those questions will shape the debate.
What Happens Next
Watch parliament first.
Will it pass the plan by December 2?
Watch which projects survive.
Watch also for news on chip factories.
New factories take years to build.
Watch for news on the home-grown model.
A top model needs chips, power, and skilled people.
All three take time.
Final Thoughts
South Korea is not just watching the AI race.
It is paying to join it at the front.
A record budget shows that intent.
Now parliament must decide if the plan becomes real.
Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.
Sources: CNBC, https://www.cnbc.com/2026/11/02/south-korea-ai-spending-budget.html ; Aju Press, https://www.ajupress.com//view/20261102111057061 ; Reuters via Asia Daily, https://asiadaily.org/news/17208/
Related post: https://thefinanceclass.wordpress.com/2026/11/01/south-korea-exports-nearly-double-october-ai-chip-demand/
Tag: Chips
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South Korea Plans a Record Budget to Build Its Own Top AI Model
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Marvell Will Buy Lumentum in a $115 Billion Deal to Power AI Data Centres
Introduction
Marvell will buy Lumentum. The deal is worth $115 billion in total value. It is one of the biggest deals of 2026. Both firms work on parts that help computers talk to each other. Now they want to do that work together, for AI data centres.What Happened
Marvell Technology and Lumentum made a deal on Monday, November 2. Marvell will buy Lumentum in an all-stock deal. All-stock means Marvell pays with its own shares, not with cash. A share means a small piece of a company. Lumentum owners will get 4.5 Marvell shares for each Lumentum share they own. That works out to about $1,132 for each Lumentum share. That price is about 23.9% higher than Lumentum’s price on October 28. October 28 was the last day before news of a possible deal came out. A premium means extra money above the old price. After the deal closes, Marvell owners will own about 67% of the new firm. Lumentum owners will own about 33%. Both boards said yes to the deal. The deal should close in the first half of 2028. It still needs yes votes from owners and from regulators. A regulator is a group that checks big deals follow the rules. Marvell shares rose about 2.8% in early trading on Monday. Trading in Lumentum shares was paused for a time.Key figures
- Total deal value: $115 billion
- Price for each Lumentum share: about $1,132
- Premium above the October 28 price: about 23.9%
- Shares Marvell owners will hold after: about 67%
- Shares Lumentum owners will hold after: about 33%
- Size of the market they can sell to: about $550 billion
- Money they hope to save each year by working together: more than $1 billion
- Lumentum first-quarter revenue: $1.26 billion, just above the $1.25 billion people expected
Why It Happened
AI data centres need very fast links. A data centre is a big building full of computers. These computers must share huge amounts of data, very fast. Marvell makes chips and electrical links. Lumentum makes lasers and light-based parts. Light-based parts move data with light, not with wires alone. Light can move data very fast. Put together, the two firms can sell a fuller set of links for AI. Marvell boss Matt Murphy will stay as boss of the new firm. Lumentum boss Michael Hurlston will join Marvell’s board. A board is a small group that helps run a company.Why It Matters
AI firms are spending huge sums on data centres. They need faster links to make AI work well. This deal is a big bet that this need will keep growing. It is also Marvell’s biggest buy since its $10 billion Inphi deal in 2021. It will make Marvell a stronger rival to Broadcom, a bigger chip firm. But a big deal is not a sure win. The firms must join their teams and products with care. They must also pass checks by regulators.What Happens Next
Owners and regulators will look at the deal next. That work will take many months. The close is not expected until the first half of 2028. Watch for news on approvals. Watch also for news on how the firms join their work. If the deal closes, the new firm will be a major seller of AI links.Final Thoughts
This is a simple idea, on a very big scale. Two firms that make link parts want to become one stronger firm. AI made that idea worth $115 billion. Now they must show they can make it work.Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.
Sources: CNBC, https://www.cnbc.com/2026/11/02/marvel-to-buy-lumentum-in-115-billion-deal-in-ai-data-center-bet.html ;Marvell announcement, https://investor.marvell.com/news-events/press-releases/detail/1040/marvell-and-lumentum-to-combine-creating-a-category-leader-in-ai-connectivity ; Reuters report, https://kelofm.com/2026/11/02/marvell-to-buy-lumentum-in-115-billion-deal-in-ai-data-center-bet/
Related post: https://thefinanceclass.wordpress.com/2026/11/01/ai-meta-ads-google-search-growth/
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Intel Stock Plunges 25% After Weak Forecast, Despite a Strong Quarter
Intel delivered a strong third quarter, and its stock still crashed. Shares fell about 25% in premarket trading on Friday, October 30, after the chipmaker gave a weak forecast for the final three months of the year.
It is a strange situation: the company beat expectations, yet investors ran for the exit. The reason is simple. In the stock market, what a company says about the future often matters more than what it just did.
What Happened
Intel reported its third-quarter results on Thursday, October 29, after the market closed. Revenue rose 21% from a year earlier to $16.5 billion. Adjusted earnings per share came in at $0.52, well above the roughly $0.40 analysts expected. The company’s data centre and AI division was the star, with revenue jumping 78% to $7.3 billion, helped by strong demand for its Xeon server chips.
But then came the forecast. For the fourth quarter, Intel expects revenue of only $15.0 billion to $16.0 billion, and adjusted earnings of $0.25 per share. Analysts had expected about $17.1 billion in revenue and $0.43 per share. That gap was enough to send the stock sharply lower, first in after-hours trading on Thursday and then again in premarket trading on Friday.
Why It Happened
Intel pointed to a weak personal computer market. Its PC chip business, called Client Computing, saw revenue fall 5% to $8.1 billion in the third quarter. Management said the PC slowdown is expected to continue at least through the first half of 2027. The company’s chief financial officer, David Zinsner, said global PC shipments could fall about 12% in 2026 and another 10% in 2027.
Supply problems added to the trouble. Intel said it is struggling to make enough chips to meet demand for its Xeon server processors, and an incident at its factory in Israel in October disrupted production for about two weeks. The company estimated that incident would cut fourth-quarter revenue by about $300 million.
Intel also expects its profit margin to shrink. Its adjusted gross margin, which measures how much profit it keeps from each dollar of sales after production costs, is forecast to fall to 38% in the fourth quarter, from 44.1% in the third quarter.
Think of it like a restaurant that had a great month because a big event brought in crowds, but then tells customers that next month will be quiet and costs will be higher. Even if the past month was excellent, people will worry about the next one.
Key Figures
- Q3 revenue: $16.5 billion, up 21% year over year
- Q3 adjusted earnings per share: $0.52 (expected: about $0.40)
- Data centre and AI revenue: $7.3 billion, up 78%
- PC chip revenue: $8.1 billion, down 5%
- Q4 revenue forecast: $15.0 billion to $16.0 billion (expected: about $17.1 billion)
- Q4 adjusted earnings forecast: $0.25 per share (expected: about $0.43)
- Q4 adjusted gross margin forecast: 38%, down from 44.1% in Q3
Why It Matters
Intel’s fall dragged other chip stocks down with it. Shares of AMD, Nvidia and Broadcom all dropped in premarket trading on Friday. When a company as large as Intel warns about the PC market, investors worry the whole industry will feel it.
The story also matters for Intel’s comeback. The company has been trying to rebuild its manufacturing business and win back ground it lost to rivals. A strong data centre quarter shows progress, but the weak forecast reminds investors that the recovery is not smooth, and that making chips is expensive. Intel plans about $20 billion in manufacturing investment in 2026, and even more in 2027, while warning that positive free cash flow may not return this year.
What Happens Next
Investors will watch two things. First, whether PC demand stabilises in early 2027, as Intel hopes, or keeps falling. Second, whether Intel can fix its supply problems and turn strong demand for its server chips into actual sales. The company’s next earnings report, early in 2027, will show whether the weak fourth quarter was a temporary dip or the start of a longer slump.
Final Thoughts
Intel’s quarter is a good example of why “beat expectations” does not always mean “stock goes up.” The past quarter was strong, but the forecast was weak, and the forecast won. For anyone learning about stocks, that is one of the most important lessons: the market is always looking forward.
Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.
Sources: CNBC, “Amazon falls 7%, Intel plunges 25% in premarket trading, as pressure mounts after earnings” (https://www.cnbc.com/2026/10/30/amazon-intel-earnings-big-tech-ai-spending-concerns.html); Intel Q3 2026 financial results press release (https://www.intc.com/news-events/press-releases/detail/1786/intel-reports-third-quarter-2026-financial-results).
