KT and Microsoft to develop AI models for Korea

KT Chief Executive Officer Kim Young-sup (right) and Microsoft Chairman and CEO Satya Nadella shake hands during a signing ceremony at the Microsoft headquarters in Redmond, Washington, Friday. (KT)

South Korean mobile carrier KT has forged a five-year, multibillion-dollar partnership with Microsoft to develop customized artificial intelligence solutions for Korea and to build a tech innovation center, the company said Sunday.

Signing the agreement at the Microsoft headquarters in Redmond, Washington, Friday, the two sides agreed to collaborate in the areas of AI, cloud technologies and information technology, and for Microsoft to commit its resources in the areas of infrastructure and people, KT said.

“The partnership with Microsoft presents a pivotal opportunity, not only for technological collaboration but also for expanding Korea’s AI foundation and driving transformative innovation across industries and daily life,” said KT Chief Executive Officer Kim Young-Shub.

“Leveraging this strategic partnership, we aim to rapidly evolve into an AICT company with unparalleled competitiveness in domestic and global markets," he added, using the word term to combine artificial intelligence with information and communication technology.

The Korean firm said the partnership is worth several trillion won, but the exact amount was not specified.

Microsoft Chairman and Chief Executive Officer Satya Nadella hailed their partnership.

“Together, we will help accelerate the AI transformation of Korean organizations across the private and public sector and build new AI-powered experiences for millions of consumers,” Nadella said.

According to KT, it will drive progress in five pivotal areas with Microsoft over the next five years: development of customized AI solutions for Korea, delivering Korean sovereign cloud solutions, establishment of an AI transformation-specialized service company, AI R&D capabilities advancement across Korea and KT’s AICT transformation.

For the envisioned AI solutions, KT said they will be using GPT-4o and Microsoft’s Phi family of small language models and the company's extensive set of high-quality data on Korean culture and industries.

The service models will be used for both KT’s internal and consumer applications such as customer service chatbots, and also for building industry-specific AI solutions for business-to-business customers across industry verticals to serve the needs of Korean consumers and businesses, KT said.

The telecom giant will also leverage Microsoft Copilot Studio and Azure AI Studio to develop custom AI agents aimed at differentiating customer experiences.

Under the partnership, the two companies will establish a new AI-specialized service company to help businesses across Asia smoothly adopt AI technology. They will also develop and launch Secure Public Cloud services, which is KT's sovereign cloud solution built on Microsoft Cloud for Sovereignty for Korean-regulated industries, KT said.

KT will also receive support from Microsoft in establishing a co-innovation center in its headquarters in central Seoul. The two companies will help businesses build, develop and prototype new AI solutions there.

"For the future of technology collaboration, KT and Microsoft Research’s research leaders and business visionaries will explore high-impact research initiatives in network modernization, AI for health care and industry AI adoption, and further collaborate with leading academic institutions partnering with KT," the company said.

To enhance the overall IT infrastructure, KT will migrate existing IT workloads including mission-critical applications to Microsoft Azure, while developing a new data platform and AI services powered by Microsoft Fabric and Azure OpenAI Service.

The company said it also intends to deploy Microsoft 365 Copilot and GitHub Copilot for all KT employees and developers to supercharge the productivity of the entire business. Microsoft will assist KT in equipping more than 19,000 employees with cloud and AI skills, the company added.

The latest agreement between the two companies came after they established ties in June.

By Jo He-rim(herim@heraldcorp.com)