South Korea’s Knowledge Services Deficit Widens as AI and Streaming Payments Surge

South Korea’s knowledge services trade deficit widened to $6.44 billion in the first half of 2026 as consumers and businesses increased spending on foreign streaming platforms, artificial intelligence services and industrial software.

The first-half shortfall was $1 billion larger than the $5.44 billion deficit recorded in the second half of 2025, the Bank of Korea said Thursday. It was the country’s second-largest deficit for any six-month period, behind the $7 billion gap posted in the second half of 2010.

The figures highlight a growing imbalance between Korea’s strong exports of cultural content and its rising dependence on overseas digital services and intellectual property. The deficit in intellectual property royalties increased by $900 million from the previous half-year to $4.9 billion.

Payments associated with computer and mobile software were a major driver. That category, which includes charges for AI services, recorded a deficit of $2.84 billion, up from $2.31 billion and the highest level ever reported. Bank of Korea balance-of-payments official Park Seong-gon said card transaction data showed that the category containing AI services had doubled from a year earlier, although AI-related spending remained relatively small in absolute terms.

Multimedia copyright fees, which include streaming subscriptions, also deteriorated. The category shifted from a $290 million surplus in the second half of last year to a $40 million deficit in the first half of this year. Higher payments for overseas semiconductor-related industrial software and online services, including games, further widened the overall gap.

Korean cultural exports provided a partial counterweight. The surplus in cultural and leisure services rose to $720 million from $530 million. Performance and exhibition services, supported by overseas K-pop concert revenue, generated a $330 million surplus, compared with $240 million in the preceding half-year.

Multimedia production services, including Korean dramas made for international streaming platforms, posted a surplus of $380 million, up from $290 million. Cultural and leisure service exports reached record levels for a second consecutive half-year, while performance and exhibition exports set records for a fourth straight period beginning in the second half of 2024.

The data show that Korea’s global content industry continues to generate expanding overseas revenue, but those gains have not kept pace with the country’s growing bill for imported software, digital subscriptions and intellectual property. The widening deficit may sharpen attention on Korea’s capacity to develop competitive domestic platforms and software while sustaining the export momentum of its entertainment sector.