OpenAI partners with Kakao in South Korea

In a major move aimed at reshaping the Asian tech landscape, OpenAI is making significant strides into the region. This initiative is highlighted by a strategic collaboration with South Korean tech giant Kakao, marking a significant step in the OpenAI Kakao partnership. This alliance, revealed shortly after a major agreement with SoftBank, is set to integrate OpenAI’s advanced artificial intelligence into KakaoTalk, potentially representing a major development in Kakao AI integration. This messaging app is used by over 97% of the South Korean market. The South Korean AI market, a crucial part of the broader Korean AI market, is projected to grow from $1.83 billion in 2022 to $20.7 billion by 2032. Given this, the Kakao OpenAI collaboration is expected to boost AI adoption and drive innovation in the region, potentially leading to significant AI advancements in South Korea.

This development comes just a day after SoftBank announced a substantial commitment to utilize OpenAI’s technology. SoftBank has allocated a budget of $3 billion to deploy OpenAI tech across its group operations and subsidiaries, showcasing the growing importance of OpenAI technology in South Korea and beyond. They will also establish a joint venture, SB OpenAI Japan, to develop AI solutions tailored for Japanese enterprises. This partnership emphasizes the Asian market’s importance to OpenAI’s global strategy, as it aims to expand its reach and refine its neural networks with diverse language data.

The Kakao news was announced at an event in Seoul, co-led by Kakao CEO Shina Chung and OpenAI CEO Sam Altman. This partnership will initially cover three projects. These include creating a new Korean-language assistant called Kanana, powered by OpenAI, integrating OpenAI tech into KakaoTalk, a move that could be described as a significant step in KakaoTalk AI integration, and Kakao becoming a customer of OpenAI’s, using ChatGPT Enterprise internally. The potential for a ChatGPT Korean version has also been discussed, though not yet confirmed. “This partnership marks a significant milestone in integrating AI into mainstream social media platforms in Asia, and a potentially important development for AI chatbot development,” said an industry spokesperson, as reported by OpenTools.

“Korea is a very impressive market,” Altman stated at the press event. “The adoption of AI in Korea is remarkably advanced, demonstrating great potential for AI innovation in South Korea. Considering various industries, from energy to semiconductors and internet companies, there is a very strong environment conducive to applying AI. It is a market that is extremely important to us and is growing rapidly.”

The collaboration between Kakao Brain and OpenAI forms a strong force in the AI field. Kakao Brain, Kakao’s AI research arm, has already developed KoGPT, a large-scale natural language processing model for the Korean language. It’s trained on 6 billion model parameters and 200 billion token data. This Korean language AI model holds significant promise. “Combining Kakao Brain’s KoGPT with OpenAI’s GPT models can create more powerful and versatile AI services for Korean users, potentially enabling OpenAI API access for enhanced functionalities,” according to a report by Wowtale. This partnership is a crucial part of Kakao’s broader AI strategy, which involves coordinating various AI models to enhance performance and user experience.

However, OpenAI’s expansion into Asia faces challenges, particularly with the rise of Chinese AI firm DeepSeek. DeepSeek’s high-performance, cost-effective AI models are challenging OpenAI’s established position. This is forcing a strategic reassessment of market approaches. “The emergence of DeepSeek’s R1 model presents a significant competitive pressure on OpenAI, especially within Asian markets,” as noted by OpenTools. In response, OpenAI is reportedly considering making some of its products open-source and is forming strategic partnerships, like this AI collaboration, to enhance its presence in Asia.

Beyond Kakao, OpenAI’s partnership with SoftBank is deepening, with the creation of SB OpenAI Japan. This is a joint venture focused on developing AI technology specifically for the Japanese market. SoftBank has committed to spending $3 billion annually to integrate OpenAI’s AI technology across its portfolio of companies. Moreover, the two companies are collaborating on the ambitious Stargate project. This is a $500 billion initiative to build AI data centers and power generation plants in the U.S. to support the growing computational needs of AI technology.

Last week, OpenAI introduced Operator, an agent capable of carrying out tasks like vacation planning and restaurant reservations on the web. They also introduced the o3-mini, the latest and most cost-effective reasoning model. The creator of ChatGPT also unveiled a new capability called Deep Research, which can perform in-depth internet research for complicated tasks.

South Korea’s proactive approach to establishing a regulatory framework for AI development, as seen in the AI Basic Act, presents both challenges and opportunities for companies like OpenAI. This legislation emphasizes transparency, accountability, and ethics in AI technology. It requires businesses to notify users of high-impact or generative AI usage and clearly label AI-generated content.

As OpenAI expands its global reach, these partnerships and initiatives signal a major push into the Asian market, indicative of global AI expansion and a focus on AI-powered mobile services. This sets the stage for a transformative shift in the region’s technological future. By leveraging local expertise, diverse language data, and strategic alliances, OpenAI aims to maintain its competitive edge. It also seeks to drive further innovation and shape the future of AI on a global scale.