Kakao Splits Into AI and X: Dual Engines for Accelerating AI and Discovering New Growth (Comprehensive)

Kakao AI, Focused on AI and Platforms: Racing Ahead in Agentic AI

Kakao X to Discover New Growth Engines and Support Subsidiary Expansion

Kakao AI to Be Led by Current CEO Jung Shinah

Kim Doyoung, CEO of Kakao Investment, Appointed to

Kakao is undertaking a comprehensive restructuring of its governance structure to accelerate innovation in the era of artificial intelligence (AI).

On August 21, Kakao announced that its board of directors had resolved to conduct a company split, creating KakaoAI (the new corporation) and KakaoX (the surviving corporation) through a spin-off. The split ratio, based on net asset book value, will be 0.36 for KakaoAI and 0.64 for KakaoX. Existing shareholders will receive shares in both companies according to these ratios.

Kakao Pangyo Agit in Seongnam, Gyeonggi Province. Photo by Jinhyung Kang aymsdream@

Kakao explained, "This spin-off aims to separate businesses with different characteristics and growth stages, establishing optimal execution speed and capital allocation tailored to the AI era."

KakaoAI, the newly established entity, will focus on rapidly expanding AI services in everyday life, centering on KakaoTalk and AI. The company plans to organically connect AI, advertising, and commerce around KakaoTalk to create a differentiated user experience and revenue model in the era of agentic AI. Jung Shinah, the current CEO of Kakao, has been named as CEO of KakaoAI. Operating companies such as DK Techin and KN Works will be included under KakaoAI. The goal is to achieve an average annual sales growth rate of 20% through 2030 and to exceed 6 trillion won in sales for KakaoAI.

KakaoX, the surviving entity, will be responsible for supporting and managing subsidiary growth. KakaoX will discover and foster new growth pillars comparable to KakaoBank, KakaoPay, and Kakao Mobility. Kim Doyoung, CEO of Kakao Investment and head of the Group Investment Strategy Office within the Kakao CA Cooperation Group, has been appointed as CEO of KakaoX.

Kakao plans to complete the split on January 1 of next year, following an extraordinary general meeting of shareholders on December 17. The company also aims for KakaoAI to be relisted and for KakaoX to be relabeled on January 27 of the same month.

Through this corporate spin-off, Kakao aims to establish a structure that allows each entity to focus on its core growth initiatives. Although Kakao possesses a powerful platform in KakaoTalk, it has often been considered to lag behind other platform companies in AI competitiveness. As the company has grown in scale and number of affiliates, its decision-making structure became increasingly complex.

Regarding the background for this spin-off, Kakao explained, "As the scale and complexity of the business expanded, we faced a structural limitation where it was difficult to execute business strategies with speed under a single decision-making system."

KakaoAI will focus on evolving KakaoTalk into an agentic AI-centered platform. When users communicate their needs via message, a personalized AI agent will connect them to the required services and specialized agents, handling search, recommendation, purchase, and payment processes on their behalf. In this way, users will be provided with customized AI agents tailored to individual needs.

KakaoX has set a goal to foster growth areas such as virtual assets, physical AI, and global fandom. Last year, Kakao formed a won-based stablecoin task force with affiliates such as KakaoPay and KakaoBank. Earlier this year, CEO Jung identified the global fandom operating system (OS) as a new growth engine in his New Year's address.

To achieve these goals, KakaoX will utilize approximately 2.3 trillion won procured through asset securitization, as well as about 4.1 trillion won in investment resources held by its subsidiaries. The company aims to achieve an average annual revenue growth rate of 13.3% in key businesses by 2030, and to build a revenue base exceeding 10 trillion won.

Kakao expects that, following the spin-off, the individual value of each business will be assessed more clearly. According to the average sum-of-the-parts (SOTP) consensus by domestic and international securities research centers, the potential value of the Kakao Group is estimated at around 34.2 trillion won. This is approximately 17.4 trillion won higher than Kakao's average market capitalization of about 16.8 trillion won over the past three months.

KakaoAI and KakaoX plan to regularly disclose key financial indicators and capital allocation principles—including sales, profitability, investment execution, and shareholder returns—as well as expand domestic and international investor relations (IR) programs and shareholder engagement initiatives.

Measures to enhance shareholder value have also been announced. KakaoAI will use 20% to 35% of its separately adjusted free cash flow (FCF) as the primary resource for shareholder returns. KakaoX will use 30% of subsidiary dividends and 30% of investment gains for shareholder returns. The 300 billion won recently secured through the sale of a stake in Dunamu will be used for share buybacks and cancellation.

CEO Jung stated, "This split is a decision aimed at transforming Kakao into a structure with the speed and accountability required in the AI era. KakaoAI and KakaoX will each establish their own business strategies and capital allocation principles, execute more quickly, and strive to communicate their achievements transparently to the market."

Kakao founder Brian Kim said, "In the mobile era, Kakao was the first to venture into unexplored territory, driving innovation and transforming users' everyday lives. As the AI era demands a different level of agility, we will help redesign the growth structure with two engines—KakaoAI and KakaoX—so that the resulting benefits are shared by shareholders, users, and crew alike."

This content was produced with the assistance of AI translation services.