[The Editors' Verdict] Kakao Trapped in the Spin-Off Narrative Risks Missing the Golden Time for 'AI Survival'

The reasons behind Kakao’s declining stock price can be seen in the union’s opposition to the spin-off of KakaoAI (the newly established corporation) and KakaoX (the surviving corporation). In the rapidly evolving artificial intelligence (AI) industry, the union’s hardline stance, which impedes the company’s ability to respond swiftly to change, is emerging as a critical management risk for Kakao.

The union criticizes management’s decision to pursue a spin-off, likening it to prior instances of “split listings.” However, the union’s criticism overlooks the intention of “selection and concentration” in Kakao’s move—separating complex business structures to improve the efficiency of decision-making and capital allocation for each business, and mobilizing company-wide capabilities to generate synergy between AI and the platform.

The union has also interpreted the decision as an effort to restructure the organization for succession of management control, and has equated the abolition of the Corporate Alignment (CA) council—which was intended to enable swift independent management and decision-making—with an attempt by the founder to evade judicial risk and responsibility. These arguments lack persuasiveness. Given the ferocity of global competition among major information technology companies that are pouring astronomical amounts of capital into the sector, such interpretations appear to be unduly far-fetched.

However, it would be inappropriate to attribute the current situation solely to union obstinacy. Kakao’s lack of communication and immature management practices—exposed by its failure to persuade even its own employees about this life-or-death decision—have become painfully clear through the union’s backlash. The leadership’s inability to foster internal cohesion at such a critical juncture is freezing investor sentiment, which had hoped for new synergy from this “selection and concentration” strategy. If internal discord continues, even a brilliant blueprint cannot convince the market.

With this spin-off decision, Kakao’s management aims to create “two engines” for growth: the monetization of AI and the investment and cultivation of new businesses. This comes at a time when major government-initiated projects, such as “Independent AI Foundation Model” and the nationwide free AI chatbot “AI for Everyone,” are gaining traction, placing AI at the forefront of corporate survival. The securities industry has also issued positive assessments, indicating that the spin-off will enable Kakao to efficiently manage over 6 trillion won in AI investment resources and that the new KakaoAI could be valued at up to 17 trillion won thanks to its dominant Talkbiz platform.

Kakao cannot afford to waste time on internal strife. Management must demonstrate mature leadership by allaying internal concerns through transparent and sincere communication. At the same time, the direction for transformation, centered on AI, must be upheld without compromise. The union, too, must set aside blanket opposition and come together to devise ways to restore Kakao’s AI competitiveness, which is vital to the company’s survival. The market is watching dispassionately to see whether Kakao can quickly resolve its internal conflicts and rise as the true national leader in Korea’s AI service market.

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