Naver all in on AI with 1 trillion won fund for ecosystem, plan for platform-wide integration

Naver will invest around $700 million over six years to foster Korea's AI ecosystem as the portal giant pursues platform-wide integration of the technology.

Naver CEO Choi Soo-yeon addresses the audience at her keynote speech of the company's annual developer conference, "Dan 24," held in southern Seoul's Coex on Monday. [NAVER]

Domestic portal giant Naver will invest 1 trillion won ($717 million) over the next six years to foster Korea’s AI ecosystem, with a focus on developing an AI-focused educational curriculum.

This investment is part of the company's broader commitment to societal betterment. As part of this initiative, its nonprofit educational arm, the Naver Connect Foundation, will allocate 60 billion won over the next five years to expand AI education and cultivate AI talent.

The firm will establish a dedicated committee to manage the fund, chaired by Naver’s CEO, Choi Soo-yeon.

“[The fund] will address issues such as AI education and access to infrastructure, which is crucial for AI education for elementary, middle and high school students,” Choi said at a press event during Naver’s annual developer conference, “Dan 24,” held at southern Seoul’s Coex on Monday.

“The committee will not only allocate a budget for these initiatives but also leverage our experience, infrastructure and human resources to more closely integrate [the domestic AI ecosystem]. Our hope is that Korea’s internet market will see the birth of companies even larger than Naver. We often say that we want to see startups, companies, and talent thriving in the AI era, and we expect the fund to play a catalytic role in nurturing these future leaders and companies.”

Naver CEO Choi Soo-yeon, second from right, answers questions from the local press related to the company's AI strategy at Coex, southern Seoul, on Monday. [NAVER]

Naver announced through the conference that it will begin deploying AI in its current line of platform offerings next year, which it called its “on-service AI” strategy. The Naver chief emphasized that the company “will continue to invest as much as one-fourth of its total annual revenue” into AI research and development (R&D).

Naver’s 2023 revenue came to 9.67 trillion won, and is estimated to surpass 10 trillion won this year — meaning that up to 2.5 trillion won will be spent on developing AI technology.

One of the features imminent for commercialization is the AI Briefing feature, expected to be released on the platform by the first half of 2025.

The feature will offer tailored summaries for factual questions, highlight source documents for exploratory searches and aggregate information for complex long-tail queries. It will provide users with guided follow-up questions within search sessions, as well as connect them with related information from Naver’s other services, such as the company’s e-commerce service, Naver Shopping, and reservation and review service Naver Place.

The briefing feature will support two other foreign languages; English and Japanese.

Naver will also integrate its spatial AI technologies in its navigation service as well as export its digital twin technology overseas to countries such as Saudi Arabia and Japan.

For Naver Map, the new “Street View 3-D” feature will be incorporated into the navigational app sometime next year, providing 3-dimensional representations of physical locations to offer such services as detailed directions within a building complex and virtual reality tours of offline events such as pop-up stores.

Its digital twin technology has already been exported overseas. Naver reported earlier that it clinched a $100 million digital twin platform deal with Saudi Arabia’s Ministry of Rural Affairs and Housing, which intends to use digital replicas for city planning, weather simulations and forecasts of the impacts of natural disasters.

Naver’s R&D subsidiary, Naver Labs, is also collaborating with Swiss robotics startup Swiss-Mile to integrate robots at construction sites, and with Japan’s NTT East to deploy robots and augmented reality (AR) guides in smart buildings.

In the e-commerce sector, Naver will release a separate app powered by AI by the first half of next year that offers personalized shopping recommendations. The company plans to expand its delivery options as well, entering the already-saturated domestic market led by Coupang to include a “now delivery” option that delivers products within an hour and “dawn delivery” that will guarantee arrival by the next morning.

The monetization of the array of AI services, however, is yet to be determined, according to Choi.

“We acknowledge that our competitors are Big Tech companies with AI capabilities, and our goal is to internalize the technologies that are essential for our business,” she said. “Just as we previously anticipated the need for spatial intelligence technology and made early investments through Naver Labs, we will continue to invest in R&D for AI technologies. We expect to see returns from the monetization of some generative AI-based services in the coming year, but we also firmly believe that proactive investments will remain necessary.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]