Kakao, the operator of South Korea’s leading messenger app, KakaoTalk, has unveiled its plans to launch a new artificial intelligence (AI) foundation model after October this year. Kakao Corp. is set to transform KakaoTalk into an AI-powered platform, combining communication and social networking features with business functionalities.
Additionally, Kakao Corp. plans to unveil KoGPT 2.0, an upgraded version of its super-giant AI model, later this year and leverage external large language models (LLMs) to build a customized AI lineup optimized for each of its major services.
The aim is to balance performance and cost efficiency while integrating various services into the model. CEO Hong Eun-taek emphasized the need for a versatile approach, stating that a sole hyper-scale model might not be the most optimized solution to provide all services effectively.
The company aims to attract a significant user base, with a target of over 10 million daily active users, representing approximately one-fifth of South Korea’s population.
KoGPT 2.0, the highly anticipated model, will be comparable to ChatGPT and will come in various sizes with different numbers of parameters ranging from 6 billion to 13 billion, 25 billion, and 65 billion.
The parameter increase is expected to enhance the model’s capacity to memorize training data effectively. Kakao’s AI technology research and development subsidiary, Kakao Brain, developed the Korean language-based AI model KoGPT, which is also on track to be revealed as planned, likely after October.
With the aim of providing cost-effective AI solutions, Kakao will conduct tests on models of various sizes. By optimizing the AI model’s parameters, the tech company seeks to combine KakaoTalk, its dominant mobile messaging app, with advanced AI capabilities, generating synergies in communication with individual users and business partners.
Integrating AI into KakaoTalk opens up possibilities for linking AI with transactional services on the platform, facilitating activities such as orders, bookings, consultations, and payments, benefiting both users and businesses alike.
Kakao’s vast business portfolio encompasses various industries, including online banking, gaming, entertainment, and taxi-hailing services. Its taxi-hailing app, KakaoT, holds the top position in South Korea’s ride-hailing market.
According to Kakao CEO Hong Eun-taek, AI’s integration into various vertical services within the community will lead to enhanced user experiences. The company aims to leverage AI in the delivery, travel, and hospitality sectors, offering users better choices and opportunities while providing support and consultation when needed.
KakaoTalk is expected to employ a lightweight model with 6 billion parameters, efficiently delivering message summaries to its users.
During the second quarter of this year, Kakao witnessed a noteworthy surge in revenue, surpassing the 2 trillion won mark for the first time, marking a 12% increase.
However, the company’s operating profit margin experienced a decline, standing at 5.6%, compared to the previous year’s 9.4%. The decrease was attributed to the significant investments in AI infrastructure and data centers, resulting in a 17% rise in operating expenses to 1.9 trillion won during the same quarter.
Despite the revenue growth, Kakao reported a 44% decrease in net profit, amounting to 56.3 billion won, while sales registered a 12.1% increase, reaching 2.04 trillion won during the cited period.
The company’s active investments in AI, healthcare, and data center facilities led to a 17% rise in operating costs, totaling 1.92 trillion won in the second quarter.
Kakao Brain, the company’s AI technology research and development subsidiary, incurred increased operating losses during the April-June period due to substantial infrastructure costs associated with building foundation models.
These losses are expected to continue growing in the latter half of the year as Kakao continues its dedicated investment in research and development and advances the construction of next-generation AI technologies.
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