Kakao-backed Upstage completes Daum operator deal

South Korea-based AI startup Upstage said on May 7 it completed its acquisition of AXZ, the operator of internet portal Daum, as it looks to add its AI models to the platform’s search and content services.

The deal follows a January memorandum under which Kakao exchanged its full stake in AXZ for equity in Upstage after about four months of due diligence.

Upstage said it plans to apply its Solar large language model to Daum’s search engine and content database to move beyond keyword search and generate direct answers.

Financial terms were not disclosed.

The acquisition comes as companies in South Korea race to add generative AI to search, media, and consumer services.

🔗 Source: The Korea Times

🧠 Food for thought

Implications, context, and why it matters.

Kakao sells Daum as it narrows its focus and deepens an AI tie-up

Kakao, the South Korean internet company behind KakaoTalk, is selling non-core businesses as it centers more of the company on its messaging service 1.
Daum, the unit in the deal, now holds about 3% of South Korea’s search market, behind Naver, Google, and Microsoft’s Bing 2 3.
The transaction values Daum at about 200 billion won, or US$140 million. The stock swap lets Kakao leave the portal business while keeping a minority stake in Upstage 3.
The sale fits a wider cleanup effort at Kakao, which has cut its affiliate count from 147 at its peak to 94 3.

The acquisition gives AI startups a path to hard-to-build data sets

Upstage wants Daum for nearly 30 years of Korean-language material gathered from news, blogs, and online communities 4 3.
That archive matters for training Upstage’s Solar model. It also strengthens the company’s role in a government-backed national AI foundation model project that includes LG AI Research and SK Telecom, South Korea’s largest mobile carrier 1.
The purchase underlines a shift in value for older internet platforms. Even with weaker search traffic, their stored data can still power new AI systems 4.
Upstage plans to use the added data to push toward unicorn status, meaning a valuation above 1 trillion won (US$690 million), before a possible initial public offering later this year 1.