Kakao said on the 21st that it will spin off its KakaoTalk-centered business and its affiliate investment and management business into separate companies to speed up decision-making in its artificial intelligence (AI) business. It said more than 80% of the board and investment review agenda items at the Kakao parent have focused on subsidiary issues, making it difficult to devote sufficient management resources to the AI business.
Kim Do-young, the CEO-designate of KakaoX (currently CEO of Kakao Investment), said at an online press briefing hosted by Kakao, "A significant portion of the Kakao parent's management resources were spent dealing with and managing problems at subsidiaries, which were urgent rather than important," and added, "If we don't pick up speed now, we could miss a critical moment to become a leader in business-to-consumer (B2C) AI services."
◇ "Eighty-five percent of board agenda items are related to subsidiaries"
Kim said that about 85% of 23 major agenda items handled by the Kakao board over the past five years were related to supporting subsidiaries. Over the past year, 84% of 32 internal investment review items also involved subsidiaries. "In the capital markets, over the past two to three years, there have been strong demands to commercialize B2C AI services and clarify business models," Kim said. "By contrast, Kakao used most of the management and board's focus to solve problems at subsidiaries facing difficulties or in need of capital support."
After the split, the two companies will be managed independently. Kim said there is "no plan at all" to convert KakaoX into a holding company. He also said organizations like the CA council, which coordinated cross-affiliate issues, will likely no longer be necessary. However, business cooperation between the KakaoTalk platform and affiliates under KakaoX will continue as before.
Founder Kim Beom-su's control will also remain unchanged. After the spin-off, the equity held by Kim and his personal company K Cube Holdings will be allocated to the two companies in the same proportion. "As founder and major shareholder, he will continue to play a role in supporting growth and innovation," Kim said.
KakaoAI will launch at the time of the split with about 2.3 trillion won in cash. Based on this year, its annual EBITDA generation capacity is expected to be about 700 billion won. Kim said it can pursue both AI investment and shareholder returns with its own cash flow. KakaoX will deploy a total of 6.4 trillion won for investment, including 2.3 trillion won of its own funds and 4.1 trillion won held by affiliates. In techfin, it will nurture virtual assets and stablecoins; in content, a global fandom platform; and in mobility, robotaxis and Smart Logistics as new growth engines.
◇ "Half of AI requests processed on devices… 90% cut in server costs"
Chung Shin-a, the CEO-designate of KakaoAI (currently CEO of Kakao), said she will combine KakaoTalk's 50 million users with the company's own lightweight AI models to build cost-efficient AI services.
KakaoAI plans to process about half of user requests on devices such as smartphones using its own lightweight model "Kanana Nano." Only complex requests will be sent to server AI models and specialized agents. "By prioritizing on-device processing and linking to intelligent models, we can maintain performance while cutting server inference expenses by up to 90%," Chung said.
It will continue to develop its own AI models. Chung said, "Rather than large overseas models, we need models tailored to Kakao services that understand user context and can reduce costs," adding, "We will continue to independently develop models required for our services." It plans to focus on nurturing internal talent, recruiting key external talent, and partnering with external players rather than pursuing large-scale mergers and acquisitions.
KakaoAI set targets of 20 million AI daily active users (DAU) and more than 6 trillion won in total revenue by 2030. It plans to grow AI advertising, agent commerce, and subscriptions to expand AI revenue to more than 1 trillion won and achieve an operating margin of at least 30%. "By integrating AI into KakaoTalk, which is closest to the daily lives of 50 million users, we will grasp user intent and connect it to actual execution," Chung said. "We will create a formula for success in the AI market in Kakao's own way."