Kakao is adding an artificial intelligence (AI) service that operates on a 'user relationship basis' to its messenger platform KakaoTalk. This service is said to function in an 'on-device' form, allowing the implementation of AI on devices without internet connectivity, providing a strong security advantage.
Kakao is also set to launch a new AI product based on ChatGPT that is being developed in collaboration with OpenAI. The company plans to reveal the specific features of this new AI service at the annual developer conference 'If Kakao' next month.
Chung Shina, the CEO of Kakao, noted during a conference call following the release of the second quarter earnings on the 7th that, "We are focusing on enhancing the user experience of existing ChatGPT with Kakao's assets and our understanding of domestic users built over time, and we are preparing more swiftly since the launch date is approaching. We expect that you will be able to directly use the product before the next earnings announcement."
Kakao has previously established a strategic partnership with OpenAI in February to jointly develop AI agents. CEO Chung said, "From the second half of this year, the AI service (ChatGPT) with the largest number of users globally will meet with Korea's most dominant mobile platform (KakaoTalk, etc.), quickly seizing the B2C AI service market for Korean consumers."
The new AI service operating within KakaoTalk is being prepared in an 'on-device' format. CEO Chung stated, "We are preparing an AI service based on relationships, which is the core experience of KakaoTalk," adding, "This AI service operates within the context of conversations." She further explained, "Rather than being a separate service occupying a specific space, it has the nature of a mid-layer, working across various spaces in KakaoTalk and recommending various actions tailored to users' intents, with plans to enable necessary actions to be completed within the chat in the future."
CEO Chung revealed that this AI service is expected to run on a lightweight on-device model developed by Kakao. He said, "Users' data privacy will be managed at the highest level" and added, "This will also allow Kakao to reduce the demand for large-scale inference models." He also mentioned, "Since we are starting on-device model services in Korea for the first time, excluding some mobile device companies, we plan to launch in a small-scale open format initially, aiming to accumulate experience for when the on-device model expands into a popular service."
Kakao announced that, on a consolidated basis, its operating profit for the second quarter of this year was 185.9 billion won, a 39% increase compared to the same period last year. Revenues increased by 1% year-on-year, reaching 2.0283 trillion won. The operating profit margin is 9.16%. During this period, operating costs were recorded at 1.8424 trillion won, a 2% decrease from the same period last year.
Kakao achieved its highest quarterly revenue and operating profit ever in the second quarter of this year. All business sectors, excluding the content sector, showed balanced growth, resulting in strong performance. Kakao plans to sequentially launch new artificial intelligence (AI) services to continue its earnings growth.