South Korean technology firm Kakao Corp. is set to announce a significant business partnership with OpenAI, integrating the American AI leader's technology into its services. This move is part of a broader strategy to accelerate its artificial intelligence capabilities and expand its presence in the competitive global tech landscape.
The collaboration comes as Kakao plans to launch a new conversational AI platform aimed at the business-to-consumer (B2C) market, distinct from its widely used Kakao Talk messaging application. This dual approach highlights the company's ambition to become a major player in the AI sector, both through strategic alliances and internal development.
Key Takeaways
- Kakao Corp. is expected to formalize a business partnership with OpenAI to enhance its AI services.
- The company is developing a new conversational AI platform for B2C commerce, separate from its primary messaging app.
- Both Kakao and its domestic rival, Naver Corp., are increasing investments in North American AI startups.
- OpenAI has established a legal entity in South Korea, a market with the highest number of paying ChatGPT users outside the United States.
- Foreign investors have recently shown confidence in Kakao, increasing their holdings while selling shares in other major South Korean tech companies.
Kakao's Strategic Shift Towards AI Integration
Kakao Corp., the operator of South Korea's most popular mobile platform, is intensifying its focus on artificial intelligence. The anticipated partnership with OpenAI marks a pivotal step in this direction, allowing Kakao to leverage world-class generative AI technology. This collaboration follows discussions held in Seoul in 2023 between OpenAI co-founders Greg Brockman and Sam Altman with Korean AI developers, signaling a growing relationship.
In addition to external partnerships, Kakao is investing heavily in its own AI infrastructure. The company confirmed on Thursday its plans to launch a dedicated conversational AI platform. This new service is designed specifically for B2C commerce, aiming to streamline interactions between businesses and consumers without relying on the Kakao Talk messaging ecosystem. This strategic separation suggests Kakao is building a more versatile and scalable AI framework for various business applications.
The Dominance of Kakao
Kakao Corp. operates Kakao Talk, a messaging application used by the vast majority of smartphone owners in South Korea. Its ecosystem extends to banking, transportation, entertainment, and e-commerce, making it a central part of daily life in the country. Integrating advanced AI is seen as a critical next step to maintain its market leadership and create new revenue streams.
A Fierce Domestic and Global Competition
Kakao's AI ambitions are unfolding amid a fierce rivalry with Naver Corp., another of South Korea's internet pioneers. Both companies are aggressively pursuing global AI talent and technology, shifting their investment focus toward North American startups. After a period of reduced investment activity, both Kakao and Naver are now ramping up their overseas ventures to secure a competitive edge in the rapidly evolving AI industry.
This international focus has raised concerns within South Korea's domestic technology scene. Local AI startups worry that the shift in investment priorities by these two giants could lead to tighter funding conditions at home, potentially stifling innovation within the country. The race for global AI dominance is forcing these corporations to look beyond national borders for the most promising technologies.
Investor Sentiment Shifts
Recent market data from August shows a notable shift in foreign investor behavior. While investors were net sellers in the South Korean stock market, offloading shares of companies like Samsung Electronics and Naver, they were actively buying stock in Kakao Corp. and Hyundai Motor Co. This suggests growing market confidence in Kakao's strategic direction, particularly its AI initiatives.
OpenAI's Strategic Interest in South Korea
The partnership is mutually beneficial, as OpenAI has identified South Korea as a key strategic market. The company recently established a legal entity in the country, a move that underscores its commitment to the region. According to OpenAI's Chief Strategy Officer, Jason Kwon, South Korea has the largest number of paying ChatGPT subscribers outside of the United States.
"The level of adoption and sophisticated use of our technology in South Korea is remarkable. Establishing a formal presence here allows us to better support our users and collaborate with innovative partners like Kakao."
This high user engagement makes South Korea an ideal market for OpenAI to deploy and refine its AI models. The collaboration with a platform as ubiquitous as Kakao provides an unparalleled opportunity to integrate its technology into services used by millions of people daily.
The Broader Trend of Korean Tech Expansion
Kakao and Naver's AI push is part of a larger trend of South Korean technology companies expanding their global footprint. Another example is Toss, the country's largest mobile financial platform. Initially a payment service app, Toss has evolved into a comprehensive "super app" offering banking and securities services.
The company is now targeting international markets, with a particular focus on Southeast Asia and Japan. This expansion by major Korean tech firms highlights a shared strategy: leveraging domestic market dominance as a foundation for global competition. For Kakao, integrating advanced AI through partnerships and in-house development is the cornerstone of this international strategy, positioning it to compete not just with Naver, but with global tech giants as well.
