Naver, Kakao set for strong Q1; AI still in investment mode

Naver and Kakao are expected to post stronger Q1 results, with revenue and operating profit up year-on-year, while their AI businesses remain in investment mode.

FnGuide forecasts Naver revenue of 3.1 trillion won (US$2.14 billion) and operating profit of 560.9 billion won (US$381 million), while Kakao is seen at 2 trillion won (US$1.37 billion) in revenue and 179.5 billion won (US$122 million) in operating profit.

Analysts cited commerce and advertising growth, but said AI products are still early and unlikely to add much to earnings this year.

🔗 Source: Chosun Daily

🧠 Food for thought

Implications, context, and why it matters.

AI investment mode brings trillion-won research spending and more data centers

Naver spent a record 2.2 trillion won (US$1.51 billion) on research and development last year 1.
Capital expenditure reached 1.3 trillion won (US$898 million), including 1.2 trillion won (US$789 million) for servers and supplies, up from 482.3 billion won (US$328 million) a year earlier 1. Naver said it finished what it called South Korea’s largest AI computing cluster in January using 4,000 units of Nvidia’s B200 (Blackwell) graphics processing units, or GPUs 1.
Kakao put 1.3 trillion won (US$884 million) into research and development and plans to invest 424.9 billion won (US$289 million) to build its Ansan data center, a large facility that houses computing and storage systems, through 2029 1.

Companies move from standalone chatbots to AI agents inside existing products

Slow early AI payoffs pushed companies away from head-to-head races with global foundation models, which are large AI systems trained on broad datasets 2.
Naver Corporation will shut down CLOVA X and Cue on April 9 while it focuses on putting AI agents across its services 2.
In the Naver Plus Store app, a shopping AI agent reviews shopping history and recommends products to support purchases 2.
Kakao plans to add its AI brand Kanana to KakaoTalk. The tools can suggest meeting dates and venues, then settle payments through KakaoPay and KakaoBank 2.