(2nd LD) Kakao Corp. to spinoff core biz to strengthen AI capabilities

South Korean tech giant Kakao Corp. announced plans to split into two separate entities, KakaoAI and KakaoX, to bolster its artificial intelligence (AI) capabilities, according to a regulatory filing. The decision was made during a board meeting and is set to take effect by January 1 of the following year. KakaoAI will focus on the company's popular messenger app, KakaoTalk, with the aim of establishing itself as an AI core company by integrating AI into advertising and commerce.

The company expects KakaoAI to generate over 6 trillion won (approximately $4.3 billion) in sales by 2030. CEO Chung Shin-a will lead KakaoAI, while the current Kakao Corp. will be rebranded as KakaoX, serving as the investment arm for future growth engines. The mobile payment service, mobility platform, and entertainment affiliates will remain under KakaoX.

Shareholders will receive shares in the new entities in proportion to their current holdings, with a 36:64 split ratio between KakaoAI and KakaoX. The move comes as Kakao seeks to accelerate investment in its expanding consumer AI business amid fierce global competition. The company currently offers various AI services centered around its Kanana AI models, which are integrated into KakaoTalk and other affiliated apps. Last year, Kakao partnered with OpenAI, enabling users to access ChatGPT through its messenger app.