Naver Expands Subsidiaries for AI, Kakao Shrinks Business Portfolio

South Korean tech giants Naver and Kakao are undertaking significant business realignments, driven by their focus on artificial intelligence as a future growth engine.

Kakao is streamlining its operations by divesting from subsidiaries with persistent losses or weak ties to its core business. The company plans to reorganize into two main entities: 'KakaoAI,' which will concentrate on AI, advertising, commerce, and related services, and 'KakaoX,' responsible for managing remaining affiliates and investing in new ventures. This move signals Kakao's strategic shift to consolidate its resources and focus on key areas.

In contrast, Naver is pursuing an expansionist strategy, acquiring overseas platforms. These acquisitions are intended to bolster its AI capabilities and development efforts. This divergence in strategy highlights the different paths the two leading tech companies are taking in their pursuit of AI dominance.