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Kakao Splits: AI and Platform Business to Form New Entity
21 Aug
Summary
- Kakao will spin off its platform business into a new company, KakaoAI.
- KakaoAI is projected to achieve 6 trillion won revenue by 2030.
- Share buybacks of 300 billion won are planned post-split.
South Korea's Kakao Corp is set to significantly restructure its operations by spinning off its core chat app platform business into a new company, tentatively named KakaoAI. This strategic separation, planned for a January 1 split, aims to foster greater business specialization and overcome a perceived conglomerate discount.
KakaoAI will concentrate on artificial intelligence, advertising, e-commerce, and its flagship KakaoTalk chat app. The remaining operations, including fintech, content, and mobility investments, will be managed under a renamed entity, KakaoX. KakaoAI is projected to reach revenue targets of 6 trillion won or more by 2030, with an operating margin exceeding 30%. KakaoX is set for a revenue target of 10 trillion won or more in the same year.
The company anticipates the new KakaoAI entity will relist on the Korea Exchange on January 27, 2027. To further bolster investor confidence, Kakao has pledged a substantial 300 billion won in share buybacks and cancellations over the three years subsequent to the split.
