KaKao

- Kakao cuts 43 affiliates in two years, CEO Chung stressing stronger fundamentals to focus on core AI businesses

- Responsible management pursued through higher shareholder value, AI talent development, and shared growth with partners and small business owners

- Growth momentum to be secured by combining AI with KakaoTalk, driving everyday innovation through user-centered AI

 

[October 13, 2025] Kakao (CEO Shina Chung) has significantly reduced the number of its group affiliates to double digits. In a shareholder letter released today, CEO Chung stated that Kakao Group currently has 99 affiliates and plans to cut that number to around 80 by the end of the year.

 

Governance efficiency has been a significant priority since CEO Chung took charge of the CA Council’s business operations in September 2023. When she assumed that role, Kakao had 142 affiliates. By the time she became CEO in March 2024, the number had dropped to 132, and it now stands at 99. This marks a 30% reduction in just two years. The move reflects both a strategic focus on key AI businesses and a broader effort to rebuild public trust.

 

Financial restructuring aimed at focusing on core businesses has also been successful. In the second quarter of this year, Kakao’s consolidated operating profit reached ₩185.9 billion, up 39% from the same period last year. This marks the highest quarterly figure in its history. Despite the economic slowdown, steady growth in the Talk Biz sector and improved profitability among affiliates strengthened its financial base. This achievement reflects not a one-time gain but a sustainable, stable financial structure.

 

Kakao is now accelerating efforts to create new growth momentum by integrating AI with KakaoTalk. Staying true to its vision of “AI for users,” Kakao plans to introduce personalized AI services that let all 50 million users access AI easily through KakaoTalk.

 

Launching in late October, “ChatGPT for Kakao” lets users access ChatGPT in the KakaoTalk Chats tab without an extra app so people of all ages can use AI naturally in conversation. The on-device AI service “Kanana in KakaoTalk” is also set for release. Using Kakao’s own lightweight model “Kanana Nano,” it runs solely on smartphones and ensures safe use by prioritizing user privacy. In addition, Kakao is also expanding its AI ecosystem by connecting external services as agents through its Model Context Protocol (MCP) and agentic AI platform unveiled in August.

 

Kakao outlined its commitment to strengthening responsible management centered on shareholder value, AI talent development in Korea, and support for small business owners in a shareholder letter. To raise shareholder value, Kakao expanded its compensation system tied to the total shareholder return (TSR) this year. It previously applied only to key executives and now applies to all executives. It also launched an AI education program for teenagers and, in partnership with Korea’s four major science and technology institutes, plans to invest ₩50 billion over the next five years to foster AI talent and support research and startups. To help small business owners focus on their core work, Kakao established the Small Business Support Task Force, which provides tailored, step-by-step assistance to strengthen mutual growth with partners.

 

CEO Chung stated, “Over the past year and a half, Kakao has swiftly restructured its group governance and improved company-wide cost efficiency, securing a financial structure that allows us to focus on future growth,” adding, “Based on this foundation, starting in the second half of this year, we will introduce another wave of everyday innovation by combining AI with KakaoTalk.” (E.O.D.)