Upstage has begun groundwork to acquire Kakao's portal Daum.
Upstage and Kakao, the parent company of AXZ, which operates Daum, said on the 29th that they each held board meetings and approved signing a memorandum of understanding (MOU) for a stock-swap transaction to acquire AXZ, the operator of Daum. AXZ is a 100% subsidiary of Kakao.
The MOU centers on Kakao transferring the AXZ equity it holds to Upstage, while Kakao acquires a certain equity stake in Upstage.
Since being spun off from Kakao in May last year, AXZ has focused on strengthening its fundamentals through swift decision-making and management efficiency. AXZ said it is advancing its business model, including launching new services, and is pushing to identify new growth engines to respond to the rapidly changing AI industry environment.
Upstage said that while seeking opportunities to expand its business based on its large language model (LLM) "Solar," it proposed a collaboration to AXZ, which has a broad user base and abundant content data. The two companies said they reached this agreement based on the need to develop new AI-based services and confidence in creating synergy.
If, after the MOU is signed and the two companies complete full due diligence, the transaction is finalized, Upstage plans to further advance its AI capabilities based on the content data held by Daum and to build a next-generation AI platform by combining the large language model "Solar" with Daum's services. The business combination of the two companies is also expected to create synergy for Upstage's independent AI foundation model project to spread the AI ecosystem nationwide.
Kim Sung-hoon, CEO of Upstage, said, "If Upstage's AI technology is combined with Daum, which has a nationwide user base, it will create an environment where more users can use AI easily and naturally." Yang Ju-il, CEO of AXZ, said, "Through synergy between the two companies, we will be able to unveil new AI services with speed."