Kakao to debut first OpenAI collaboration next month

Kakao said Thursday that it would unveil the first outcome of its collaboration with OpenAI, the creator of ChatGPT, at its annual developer conference “if(kakao)” next month, with plans to launch the product by year-end officially.

“We plan to reveal the actual shape of the product in September’s ‘if(kakao)’ event. And before our next earnings announcement, we expect everyone will be able to experience it firsthand,” said Kakao CEO Chung Shin-a during the company’s second-quarter earnings conference call.

“Starting in the second half of this year, the artificial intelligence service with the world’s largest user base and Korea’s dominant mobile platform will join forces to capture the domestic business-to-consumer AI market rapidly.”

Kakao also unveiled plans to launch Korea’s first on-device AI service based on its lightweight model through its mobile messenger KakaoTalk, signaling a new era of embedded AI experiences.

“Rather than functioning as a separate feature in a fixed space, it will serve as a ‘middle layer’ that recommends context-aware actions across various parts of KakaoTalk. In time, users will be able to complete necessary tasks entirely within the app,” she said.

The announcement came alongside Kakao’s release of its second-quarter earnings results, which exceeded market expectations and set new quarterly records for both operating profit and sales.

Operating profit for the April-June period jumped 39 percent on-year to 185.9 billion won ($134 million), while revenue rose 1 percent to 2.02 trillion won, according to the company.

These results outpaced the market consensus compiled by financial data provider FnGuide, which had forecast 125.4 billion won in operating profit and 1.95 trillion won in sales.

Kakao attributed the robust performance to balanced growth across its business lines, particularly advertising, e-commerce, payment and mobility.

“What’s especially encouraging is that Kakao has successfully enhanced operational efficiency,” the company said.

Platform revenue rose 10 percent on-year to 1.06 trillion won, driven by a 16 percent increase in business message revenue, a key focus area for the company.

Commerce-related services, including KakaoTalk-based gifting and group-buying platform TokDeal, posted a 10 percent revenue increase to 221.2 billion won, with self-purchasing via “Gift to myself” seeing notable growth. Total transaction volume for commerce in the second quarter rose 6 percent to 2.5 trillion won.

Sales from Kakao’s other platform segments — which include mobility and payment services — climbed 21 percent on-year to 434.8 billion won. The mobility division saw growth driven by parking and express delivery services, while Kakao Pay benefited from strong performance in both financial and platform-based services, achieving double-digit revenue growth.

On the contrary, portal business revenue dropped 11 percent on-year to 78.3 billion won.

The content segment saw a 7 percent decline in revenue, totaling 973.1 billion won. Gaming revenue fell, but music and story content posted slight gains, each rising 1 percent to 517.5 billion won and 218.7 billion won, respectively.