Kakao to spinoff core biz to strengthen AI capabilities
Employees at Kakao Corp.'s headquarters in Seongnam, Gyeonggi Province, June 29 / Yonhap
Korea's Kakao Corp. said Friday it plans to split its major businesses, including its popular messenger service KakaoTalk, into two entities as part of efforts to strengthen its artificial intelligence (AI) capabilities.
The plan to split the company into KakaoAI and KakaoX was approved at a board meeting, the company said in a regulatory filing.
Kakao plans to complete the spinoff by Jan. 1 next year, and relist KakaoAI on Jan. 27.
The newly created entity, KakaoAI, will oversee the company's popular messenger app KakaoTalk, with the goal of growing into an "AI core company" by connecting AI with advertising and commerce, the company said in a release.
The company said it plans to create new revenue models and aims to generate more than 6 trillion won ($4.3 billion) in sales at KakaoAI by 2030.
Kakao's Chief Executive Officer (CEO) Chung Shin-a will lead the new company.
The existing Kakao Corp. will be rebranded as KakaoX and serve as the investment arm for future growth engines. Kakao's mobile payment service, mobility platform and entertainment affiliates will remain under KakaoX, the company said.
Shareholders will receive shares in the new entities in proportion to their current stakes in Kakao, with a split ratio of 36:64 for KakaoAI and KakaoX, respectively.