Kakao establishes AI subsidiary company

By Kang Seung-woo

Kakao, the operator of the nation’s top mobile messenger Kakao Talk, has set up an affiliate that will develop artificial intelligence (AI)-based chatbots ― short for chat robot.

The move is expected to once again pit its founder and chairman, Kim Beom-su, against his old friend Lee Hae-jin, the founder and chairman of Naver, the nation’s biggest search engine that is also accelerating its investment in AI. Kim and Lee co-founded the web portal.

According to Kakao, Wednesday, the company established Kakao Brain on Feb. 1 with capital of 20 billion won ($17.5 million) to find a new growth engine and Kim assumed the CEO position ― the first time for the chairman to do so “officially.”

Although the number of its workers remains unknown thus far, some 100 are expected to work for the newly established firm.

“Kakao Brain will focus on developing key technologies regarding AI and seek various ways to improve technologies, service and business,” Kakao said.

Observers expect Kakao to take advantage of its AI affiliate to upgrade its mobile messenger amid intensifying competition.

“The establishment of Kakao Brain is aimed at developing a chatbot that will work with Kakao Talk,” said an information technology (IT) industry analyst.

Chatbot is a computer program that simulates human conversation, or chat, using artificial intelligence.

Kakao CEO Rim Ji-hoon also hinted on his social media account last month that the company’s focus is on developing chatbots, saying that Kakao Talk will evolve into a “multifunctional private secretary.”

With the AI industry emerging as a new blue ocean, the chairman reportedly strongly expressed his intention to lead the subsidiary company, with him expected to focus on advancing AI technologies and research and development.

Kim’s decision to set up the AI affiliate seems to have been motivated by its rival Naver’s investment in the business.

Last October, the Naver chairman said his company will accelerate its investment in high-tech startups, setting AI development as one of its key priorities.

At that time, the company unveiled its new digital assistant service named AMICA, aimed at understanding the intention of its users, interacting with them everywhere, including in the bedroom and out in the streets.

In addition, the Naver chairman set up a task force “J,” named after Jarvis, an AI assistant in the movie “Iron Man,” and Line Corp. Chief Global Officer Shin Joong-ho is leading the unit comprised of some 150 engineers and employees.

Kakao and Naver have already been engaged in a hard-fought competition in the mobile messenger segment with Kakao Talk and Line, respectively.