Kakao Corporation Reduces Affiliates and Introduces ChatGPT—CEO Jeong Shin-a Vows to Pursue Overwhelming Growth

[Financial News] Kakao Corporation has significantly reduced the number of its group affiliates to double digits. In a shareholder letter on the 13th, CEO Jeong Shin-a announced that the group currently has 99 affiliates and plans to reduce this number to around 80 by the end of the year.Accelerating Affiliate Reduction and Organizational RestructuringImproving governance efficiency has been a key initiative for CEO Jeong since she took charge of the CA Council business in September 2023. When she assumed the role, Kakao Corporation had 142 affiliates. By the time she was appointed CEO in March last year, the number had dropped to 132, and now stands at 99. This represents a 30% reduction in affiliates over two years. Kakao Corporation explained that this move is part of a strategic direction to focus on core businesses in the AI era and to restore public trust.
The company is also actively working to improve its financial structure to concentrate on core businesses. In the second quarter of this year, Kakao Corporation posted an operating profit of 185.9 billion KRW, a 39% increase year-on-year, marking its highest-ever quarterly profit. Despite an economic slowdown, robust growth in its Talk Business and improved affiliate profitability have solidified its financial foundation.‘ChatGPT for Kakao’ to Launch at the End of This MonthKakao Corporation is accelerating efforts to create new growth momentum by integrating AI with KakaoTalk. The upcoming launch of 'ChatGPT for Kakao' at the end of this month is a prime example. Users will be able to access OpenAI’s ChatGPT directly from the KakaoTalk chat tab, allowing people of all ages to naturally utilize AI in their conversations. The on-device AI service 'Kanana in KakaoTalk' is also set to launch soon. Powered by the proprietary lightweight model 'Kanana Nano,' it operates solely on smartphones, prioritizing user privacy and ensuring safe service. Additionally, the company is expanding its AI ecosystem by connecting external services as agents through the Model Context Protocol (MCP) and Agentic AI Platform, both unveiled last August.
To enhance shareholder value, Kakao Corporation has expanded its Total Shareholder Return (TSR)-linked compensation system, previously limited to key executives, to all executives starting this year. The company has also launched an AI education program for youth and, in collaboration with the four major Institutes of Science and Technology in Korea (KAIST, POSTECH, GIST, DGIST), plans to invest 50 billion KRW over the next five years to nurture AI talent and support research and startups. Furthermore, Kakao Corporation has established the Small Business Integrated Support Task Force (TF) to provide tailored support for small business owners, strengthening partnerships and mutual growth. CEO Jeong Shin-a stated, “Over the past year and a half, Kakao Corporation has swiftly restructured its group governance and improved company-wide cost efficiency, establishing a financial structure focused on future growth. As the window for AI innovation opens, we will respond quickly to secure market leadership and do our utmost to achieve overwhelming growth and enhance shareholder value in the near future.”
yjjoe@fnnews.com Jo Yoon-joo Reporter