Kakao Splits Business to Focus on AI Agents

South Korean IT conglomerate Kakao has announced a decision to split its operations into two new entities: Kakao AI and Kakao X. The division is expected to be completed by January 1, 2027. The newly established Kakao AI will concentrate on developing AI agents, leveraging core services like KakaoTalk.

The company stated that the split is intended to adapt its capital allocation system to the AI era. Kakao AI aims to integrate Kakao's diverse services through AI, seeking to create differentiated user experiences and business models. The vision is for users to interact with AI agents via KakaoTalk for tasks such as information retrieval, purchasing, and payments.

Kakao AI projects an increase in user engagement time of over 50%. The company targets an average annual revenue growth of approximately 20% by 2030, aiming for a total revenue of 6 trillion Korean won (approximately $4.4 billion USD) that year.

Meanwhile, Kakao X will manage the existing subsidiaries, including Kakao Bank, Kakao Pay, and SM Entertainment. It will also explore emerging businesses like virtual assets and invest in innovative companies. Kakao plans to hold an extraordinary shareholders' meeting on December 17 to approve the corporate restructuring.