Kakao to focus on AI-based services, not infrastructure
Summary
Kakao said Thursday it will focus on **AI-based services** rather than infrastructure, and plans to work with Coupang Eats to let users get menu recommendations, order and pay inside KakaoTalk. CEO Chung Shin-a said the company wants AI services that are easier to use in daily life and sees AI infrastructure as hard to make sustainably profitable. Kakao also reported record second-quarter revenue and operating profit.
Key Facts
- Kakao said the Coupang Eats partnership will be integrated into Kakao’s agentic AI inside KakaoTalk, where users can receive menu recommendations and complete orders and payments.
- Chung Shin-a said AI infrastructure businesses require massive upfront investment and continuing spending on facilities, while advanced chips and AI servers are changing rapidly.
- ChatGPT for Kakao has surpassed 13 million cumulative subscribers, and Kakao expects monthly active users of AI services on KakaoTalk to exceed 10 million by the end of this year.
- Kakao said it aims to raise the share of AI-related revenue in Talk Biz to a double-digit level by 2028.
- In the second quarter, Kakao posted 2.1 trillion won in revenue and 277 billion won in operating profit, both quarterly records, while platform sales rose 17 percent to 1.23 trillion won and content sales rose 1 percent to 868.2 billion won.
Platform giant to partner with Coupang Eats
A Kakao mascot is seen at the company's office in Seongnam, Gyeonggi Province, June 29. Yonhap
Mobile platform giant Kakao said Thursday it will focus on artificial intelligence (AI)-based services rather than infrastructure such as data centers and cloud computing, noting that its goal is to make AI services more accessible and convenient for users in their daily lives.
As part of such efforts, the company said it will partner with food delivery platform Coupang Eats and integrate the service into Kakao’s agentic AI, allowing users to receive menu recommendations and complete orders and payments within KakaoTalk, the company’s flagship messaging app.
“AI infrastructure businesses require massive upfront investment and continued expenditures on facilities, and the generation changes of advanced chips and AI servers are increasingly fast,” Kakao CEO Chung Shin-a said during the company’s second-quarter earnings call.
“Considering the recent competitive expansion of supply, it will be difficult to guarantee a sustainable profitability.”
She added: “Rather than entering the AI infrastructure business, we will focus on the layers spanning models and services that consumers use in their daily lives, thereby enhancing the company’s value.”
Kakao CEO Chung Shin-a, left, shakes hands with OpenAI CEO Sam Altman during a joint press conference on the partnership between the two companies in Seoul, Feb. 4, 2025. Korea Times photo by Shim Hyun-chul
She said the partnership with Coupang Eats will be a new step in the development of Kakao’s AI services. The AI model will identify users’ intentions to order food from the context of conversations and recommend menus based on accumulated preferences.
The company said the two sides will go beyond simply connecting their application programming interfaces and jointly design their respective roles and responsibilities, business model and operational standards.
Kakao has been expanding its AI services through partnerships with other companies. Chung said ChatGPT for Kakao, launched through its collaboration with OpenAI, has surpassed 13 million cumulative subscribers, adding she expects the number of monthly active users of AI services on KakaoTalk to exceed 10 million by the end of this year.
“Our goal is to increase the share of AI-related revenue in Talk Biz, which includes KakaoTalk-based businesses, to a double-digit number by 2028,” Chung said.
In the second quarter, Kakao posted 2.1 trillion won ($1.48 billion) in revenue and 277 billion won in operating profit, up 9 percent and 36 percent from a year earlier, respectively. Both figures marked quarterly records.
The platform business, which includes KakaoTalk-based ads, commerce and other Kakao-related platforms, saw sales grow 17 percent year-on-year to 1.23 trillion won, while the content business, which includes entertainment, music and other media operations, saw sales rise 1 percent to 868.2 billion won during the same period.
“The strong second-quarter earnings were not a temporary peak, but demonstrated the fundamental capabilities to make profits,” the company said.
“With the platform business reentering a growth phase and maintaining its momentum in the second half, we expect further improvement in the operating margin and to exceed our full-year targets of more than 10 percent revenue growth and a 10 percent operating margin.”
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