Kakao to merge with Kakao Brain to boost AI business

[Courtesy of Kakao Brain Corp.]

Kakao Corp. will absorb its artificial intelligence (AI) subsidiary Kakao Brain Corp., a move that comes seven years after the South Korean platform giant established the subsidiary in 2017 to research and develop its own generative AI model.

Maeil Business Newspaper has learned on Sunday that Kakao Brain recently held an internal town hall meeting and confirmed a business direction that mainly focuses on its merging with a new AI organization at Kakao headquarters.

The company plans to finalize its merger process by the first half of 2024.

The organizational restructuring is aimed at strengthening AI services by introducing AI technology and related services swiftly to optimize costs and establish its own formula for AI success.

Earlier, Kakao recruited Lee Sang-ho, former chief technology officer (CTO) of SK telecom Co., as the chief AI officer (CAIO) to lead its new AI organization.

“Kakao and Kakao Brain are actively considering various measures to respond to the rapidly changing AI era and maximize AI competitiveness and synergy,” Kakao said. “Specific details will be finalized through a board resolution.”

Industry attention regarding Kakao‘s AI strategy has been the timeline for the release of KoGPT 2.0 developed by Kakao Brain.

Kakao Brain had initially planned to unveil KoGPT 2.0 in 2023, but postponed it several times.

”Many language models are being competitively released at home and abroad and there are many questions about whether it would be beneficial to release its own model,“ said an industry insider. ”The Kakao leadership seems to have judged that it is more appropriate to upgrade the company’s essential services, such as KakaoTalk, and enhance AI services that can also be a substantial source of revenue for the company.“

This move also aligns with Kakao‘s recent declaration to consolidate various teams related to AI throughout the company and establish an integrated AI organization to pioneer the development of related technologies and services.

Kakao Chief Executive Officer Chung Shin-a also told reporters at an AI Strategy High-Level Consultative Council meeting last week that the company will focus on AI-based services rather than concentrating solely on the scale of language models.

Regarding the timing of KoGPT 2.0’s release, Chung said that ”it is a bit difficult to say when we will release the model.”

“Since there are many AI models released already, we plan to focus on service-centric strategies,” she said.