Kakao Corporation, a leading platform giant in South Korea, has announced its decision to merge with its Artificial Intelligence (AI)-focused subsidiary, Kakao Brain Corp. By integrating AI capabilities more effectively, the company plans to streamline operations and enhance competitiveness.
Established in 2017, Kakao Brain was created as a separate subsidiary dedicated to researching and developing its proprietary generative AI model, “KoGPT.” Over the past seven years, Kakao Brain has been key in advancing Kakao’s AI initiatives and promoting related businesses. By absorbing Kakao Brain into its headquarters organization, Kakao Corporation aims to consolidate its AI efforts.
Kakao Brain recently convened an internal town hall meeting, where it merged with a newly established AI-focused organization at Kakao headquarters. According to reports, the merger process is expected to be completed by the first half of 2024.
This consolidation signals Kakao’s concerted effort to enhance its AI capabilities and leverage synergies within its organizational structure. As Kakao Brain integrates with the AI-focused unit at Kakao headquarters, the company aims to strengthen its position in the AI domain.
Although specific details of the merger are yet to be finalized, Kakao Brain is actively considering various measures to maximize AI synergy and competitiveness. Industry watchers are keenly awaiting updates on the release timeline for KoGPT 2.0, developed by Kakao Brain, which has faced delays since its initial planned launch in 2023.
The decision to merge Kakao Brain into Kakao’s headquarters is a company’s shift towards prioritizing essential services like KakaoTalk, which are seen as potential revenue drivers. Recently, the company consolidated its various AI teams under a single integrated organization to spearhead the development of AI technologies and services.
Following an organizational restructuring on March 1, which brought all AI-related teams together, Lee Sang-ho was appointed as the Chief AI Officer (CAIO). The appointment of Lee Sang-ho, former chief technology officer (CTO) of SK Telecom, as the chief AI officer (CAIO) signaled its new internal strategy to take the AI organization forward. With the introduction of Lee Sang-ho and the reorganization of its AI division, Kakao aims to capitalize on emerging opportunities in the rapidly evolving AI landscape.
Kakao Brain is a wholly owned subsidiary of Kakao. Hence, the merger is expected to proceed smoothly and facilitate the rapid reorganization of the AI division upon approval by the board of directors.
Kakao’s Chief Executive Officer Chung Shin-a addressed the timing of KoGPT 2.0’s release, stating that it is currently challenging to specify when the model will be launched. She emphasized the company’s shift towards service-centric strategies in light of the proliferation of existing AI models.
In response to criticisms regarding its AI strategy lagging behind competitors, Kakao is intensifying efforts to accelerate its AI business, particularly by leading initiatives directly from its headquarters. As confirmed by an industry insider, the approach aims to integrate AI strategies across various services, including KakaoTalk.
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