South Korean Labour Minister Calls for AI Profit-Sharing Among Tech Giants

In a June 5 interview, Labour Minister Kim Young-hoon urged Samsung Electronics and SK Hynix to allocate a share of their AI-driven windfall profits to suppliers, subcontractors and workers after taxes, arguing that such distribution could curb widening inequality and proposing a public dialogue on “excess profits.”

Reuters

The AI surge has boosted global demand for memory chips, sending Samsung and SK Hynix to record earnings. Kim, a former labour activist appointed by President Lee Jae-Myung, recently helped broker a last-minute pay deal with Samsung’s union, averting a strike. Rising household-income disparity has intensified calls for broader profit-sharing.

Reuters

• Samsung targets annual operating profit above 200 trillion won (? $129 billion) from 2026-2028.

Reuters

• Around 1,700 suppliers support Samsung’s memory-chip production.

Reuters

• The income gap between the bottom 20 % and top 20 % of households widened most in six years in Q1 2024.

Reuters

Kim said “distribution through social dialogue” should include adjusting supplier contract prices and investing in talent at smaller firms, describing profit-sharing as “clearly reinvestment.” Samsung and SK Hynix declined comment. The People Power Party (PPP) called the idea a “dangerous” intervention that threatens the free-market system. The presidential office did not respond.

Reuters

PPP officials argued Kim’s plan resembles “communism” and could undermine South Korea’s market-based economy. Critics warned that mandating profit-sharing might set a precedent for broader state interference in corporate governance, deterring private investment.

Reuters

Samsung and SK Hynix have not provided quantitative estimates of “excess profits,” leaving the scale of any redistribution unclear. The proposal also lacks details on how supplier contracts would be adjusted or how funds would be allocated.

Reuters

• “We should set new rules for distribution through social dialogue,” — Kim Young-hoon, Labour Minister

Reuters

• “What I mean by distribution is sharing profits with suppliers,” — Kim Young-hoon, Labour Minister

Reuters

• “It is undeniable that Samsung's remarkable achievements are the result of the dedicated efforts of labour and management.” — Kim Young-hoon, Labour Minister

Reuters

• “a dangerous idea of state intervention that undermines the foundation of the free-market economy.” — Representative, People Power Party (PPP)

Reuters

Kim plans to host a multi-stakeholder forum later this year to develop profit-sharing frameworks and examine a possible “dividend” for citizens funded by AI-related tax revenue. The dialogue aims to create a lasting structure for union-company negotiations in the Korean tech sector.

Reuters