San Francisco Frontiers - Kakao Details Spinoff Plan to Monetize AI Through KakaoTalk

Under the restructuring plan, Kakao will divide into KakaoAI, which will oversee AI, advertising, commerce, and KakaoTalk, and KakaoX, managing remaining businesses including fintech and content. CEO Chung Shin-a will lead KakaoAI, while Kim Do-young heads KakaoX.

KakaoX will remain listed on the Kospi, while KakaoAI will undergo a separate review for its own listing. Shareholders are scheduled to vote on the spinoff at an extraordinary general meeting on January 15, 2027. If approved, the split takes effect on February 1 next year.

The strategy hinges on leveraging KakaoTalk's 50 million Korean users to expand AI services beyond messaging into shopping, reservations, and money transfers. The company aims for 10 million monthly active AI users this year.

KakaoAI projects annual revenue exceeding 6 trillion won by 2030, while KakaoX targets 10 trillion won over the same period. Revenue generation will come from consumer subscriptions, improved advertising, transaction fees, and commissions on partner bookings.

Building on its OpenAI partnership, Kakao plans to introduce Kanana Space, an AI assistant that analyzes chats to manage schedules and make purchases. A closed beta begins in December, utilizing proprietary models optimized for smartphone efficiency.

The split also aims to simplify valuation for investors by separating high-growth AI operations from traditional affiliates. Both new entities have outlined shareholder return plans: KakaoX will allocate 30 percent of dividends and investment profits, while KakaoAI targets a payout ratio of 20 to 35 percent of adjusted free cash flow.

Recent financial results showed an operating profit of 240.3 billion won in the third quarter, up 7.3 percent year-over-year. Major affiliates also reported strong gains; KakaoBank's operating profit rose 26.9 percent to 191.8 billion won, and Kakao Pay saw profits more than double.

S.Hall--SFF