KaKao

- Kakao to spin off into Kakao AI and Kakao X, with existing shareholders receiving shares in both companies based on the spin-off ratio

- Independent management structures will enable each company to move at a pace suited to its business, sharpening strategic focus and resource allocation for the AI era

- Kakao AI will transform KakaoTalk from a nationwide messaging platform into an “agentic AI interface that understands each user best”

- Kakao X will invest in future global value, backed by KRW 2.3 trillion in resources and a portfolio of innovative companies spanning fintech, content, and mobility

- By 2030, Kakao AI aims to generate over KRW 6 trillion in revenue, while Kakao X’s major businesses target revenue of over KRW 10 trillion

- Kakao CEO Shina Chung named CEO-designate of Kakao AI; Doyoung Kim, CEO of Kakao Investment and Head of Group Investment Strategy at the CA Council, named CEO-designate of Kakao X

 

[August 21, 2026] Kakao is redesigning its growth structure to accelerate innovation in line with the AI era.

 

On August 21, Kakao announced that its Board of Directors had approved a spin-off that will create Kakao AI as a new company, with Kakao X remaining as the continuing company. Based on the book value of net assets, the spin-off ratio has been set at 0.36 for Kakao AI and 0.64 for Kakao X. Existing shareholders will receive shares in both companies based on this ratio.

 

The spin-off is intended to separate businesses with different characteristics and stages of growth, enabling each company to operate at the speed its business requires and allocate capital more effectively in the AI era. Kakao grew rapidly by pioneering the mobile era. As the company expanded in scale and complexity, however, the limitations of a single decision-making structure became increasingly apparent, making it difficult to execute business-specific strategies with agility.

 

Over the past two years, Kakao has streamlined its governance structure around its growth businesses by divesting non-core operations and substantially reducing the number of affiliates. The spin-off is expected to serve as a launchpad for translating these structural reforms into concrete growth in the AI era.

 

The market already applies distinct valuation metrics and investment preferences to KakaoTalk and Kakao’s core AI platform on the one hand, and its vertical businesses in fintech, content, and mobility on the other. Kakao therefore concluded that operating the two groups under separate management structures would be the most effective way to enhance corporate value and competitiveness.

 

Through the spin-off, Kakao aims to create a structure in which both companies can focus on their respective growth priorities while allowing the market to assess the value of each business transparently and appropriately. With Kakao X assuming responsibility for managing subsidiaries and supporting their growth, Kakao AI will focus sharply on KakaoTalk and core AI initiatives, accelerating the rollout of user-facing AI services for everyday use. Kakao X, meanwhile, will revitalize Kakao’s culture of innovation and discover and nurture new growth engines, following in the footsteps of KakaoBank, Kakao Pay, and Kakao Mobility.

 

Kakao AI and Kakao X: Two Growth Engines

 

Following the spin-off, Kakao will develop the two companies into “two engines,” each driving a distinct growth area in the AI era.

 

Kakao AI aims to become an “AI core company,” seamlessly integrating AI, advertising, and commerce around KakaoTalk to unlock unique user experiences and revenue models in the agentic AI era. Shina Chung, the current CEO of Kakao, has been named CEO-designate of Kakao AI, which will oversee operating subsidiaries including DK Techin and K&Works.

 

Kakao AI will redesign KakaoTalk’s capabilities—built over the past 15 years around relationships, conversations, and connected services—to meet the needs of the AI era. Its vision is to transform KakaoTalk from a one-size-fits-all messaging platform into an “agentic AI interface” that understands the intent and context of each of its approximately 50 million users. When users express what they want in a message, personalized AI agents will connect them with the appropriate services and specialized agents, helping them achieve their goals across the entire journey—from discovery and recommendations to purchases and payments. In doing so, Kakao AI aims to expand the capabilities and potential of every user.

 

The company plans to secure more than 20 million daily active AI users by 2030 and increase time spent on the platform by more than 50%. By expanding new revenue streams such as AI-powered advertising, agentic commerce, and subscriptions, Kakao AI is targeting average annual revenue growth of roughly 20% and aims to generate more than KRW 6 trillion in revenue by 2030. AI-related businesses are expected to account for a double-digit share of Kakao AI’s total revenue by 2028 and generate more than KRW 1 trillion by 2030.

 

As a “future value investment company,” Kakao X will support the stable growth of its existing core business groups in fintech—KakaoBank, Kakao Pay, and Kakao Pay Securities; content—Kakao Entertainment, SM Entertainment, and Kakao Piccoma; and mobility—Kakao Mobility. At the same time, it will build new growth engines by identifying new businesses and investing in innovative companies. Doyoung Kim, CEO of Kakao Investment and Head of Group Investment Strategy at the Kakao CA Council, has been named CEO-designate of Kakao X.

 

Kakao X will target markets at the intersection of technology and everyday life that are ripe for transformation. It aims to set new standards through Kakao’s distinctive approach and scale the next generation of growth businesses by building on the group’s past successes. Potential focus areas include digital assets, physical AI, and global fandom.

 

To reach this goal, Kakao X will draw on approximately KRW 2.3 trillion secured through asset monetization, along with approximately KRW 4.1 trillion in investment resources held by its subsidiaries. Building on growth in its core businesses and returns from new investments, Kakao X is targeting average annual revenue growth of approximately 13.3% across its major businesses through 2030, with the goal of establishing a foundation for growth capable of generating more than KRW 10 trillion in revenue. Through this approach, Kakao X aims to create a virtuous cycle in which investment returns fund both shareholder returns and reinvestment, in line with its identity as a future value investment company.

 

Enhancing Corporate and Shareholder Value Through “Speed and Focus”

 

Once the two companies report their financial results and operating performance independently, the market will be able to assess the intrinsic value of each business with far greater clarity. As of August 2026, the average consensus sum-of-the-parts valuation among research analysts at domestic and international securities firms placed the potential value of Kakao Group at KRW 34.2 trillion. This is approximately KRW 17.4 trillion higher than Kakao’s average market capitalization of KRW 16.8 trillion over the preceding three months.

 

Kakao AI and Kakao X will each establish a board of directors tailored to the characteristics of its businesses, strengthening both expertise and decision-making efficiency. Following the spin-off, both companies plan to regularly disclose key performance indicators and capital allocation principles—including revenue, profitability, investment activity, and shareholder returns—while expanding investor relations briefings and shareholder communications in Korea and abroad.

 

The two companies will also implement measures to enhance shareholder value. Kakao AI will allocate 20–35% of its adjusted standalone free cash flow (FCF) as its baseline funding for shareholder returns. Kakao X has announced a shareholder return policy under which it will allocate 30% of dividends received from its subsidiaries and 30% of investment gains to shareholder returns. The company also announced plans to use gains from the recent sale of its Dunamu stake to repurchase and cancel KRW 300 billion worth of treasury shares.

 

Following an extraordinary general meeting of shareholders scheduled for December 17, Kakao plans to complete the spin-off on January 1, 2027, then relist Kakao AI and complete the listing change for Kakao X on January 27, 2027. The detailed schedule may change depending on consultations with relevant authorities and related procedures.

 

Kakao will ensure continuity in employment, working conditions, employee benefits, and business operations following the spin-off. Services, businesses, personnel, assets, technologies, and models transferred to Kakao AI will continue to operate without disruption.

 

Kakao CEO Shina Chung stated, “This spin-off marks a decisive shift to align Kakao with the speed and accountability demanded by the AI era. Kakao AI and Kakao X will each establish strategies and capital allocation principles tailored to their businesses, execute with greater agility, and communicate their progress transparently to the market.”

 

Kakao founder Kim Beom-su said, “In the mobile era, Kakao was among the first to venture into uncharted territory, driving innovation and reshaping everyday life. Because the AI era requires a fundamentally higher level of agility, we are redesigning our growth engine around two specialized pillars—Kakao AI and Kakao X. I am committed to supporting this transformation so that its success creates meaningful value for our shareholders, users, and employees alike.” (E.O.D.)