Demerger to separate KakaoTalk-centered AI business from fintech, content and mobility
Kakao said Friday it will split into two listed companies, Kakao AI and Kakao X, as the IT giant restructures its businesses around artificial intelligence.
Kakao AI will house KakaoTalk, South Korea’s dominant mobile messenger, along with the company’s AI, advertising and commerce businesses. Kakao X will bring together fintech, content and mobility under an investment-focused structure.
On Friday, the company’s board approved the demerger under which Kakao AI will be spun off as a new company while Kakao X will remain the surviving entity.
The split ratio has been set at 0.36 for Kakao AI and 0.64 for Kakao X, based on their respective net book values. Existing Kakao shareholders will receive shares in both companies according to the ratio.
Kakao said the move was aimed at giving businesses with different characteristics and stages of growth greater autonomy in strategy, execution and capital allocation.
With KakaoTalk at its core, Kakao AI will focus on developing new user experiences and revenue models by integrating artificial intelligence with advertising and commerce as the company prepares for the era of agentic AI. Operating subsidiaries including DK Techin and K&Works will also be placed under the new entity.
Kakao CEO Chung Shin-a has been tapped to lead Kakao AI. Meanwhile, Kim Do-young, Kakao Investment CEO and head of group investment strategy at Kakao’s corporate alignment council, has been nominated to head Kakao X.
“This split is a decision to transform Kakao into a structure built for the speed and accountability required in the AI era,” Chung said.
“Kakao AI and Kakao X will establish strategies and capital allocation principles tailored to their respective businesses, execute more quickly and communicate their results with the market in a more transparent manner.”
Kakao founder Kim Beom-su said the overhaul was aimed at redesigning the group’s growth structure for the AI era.
“In the mobile era, Kakao was among the first to venture into uncharted territory, creating innovations that changed users’ daily lives,” Kim said. “The AI era demands agility on an entirely different level. We will redesign our growth structure around the two engines of Kakao AI and Kakao X so that the value they create can be shared with shareholders, users and our crew.”
Kakao plans to seek shareholder approval for the demerger at an extraordinary general meeting on Dec. 17, with the split scheduled to take effect Jan. 1, 2027. Shares in both companies are scheduled to begin trading separately on Jan. 27.
yeeun@heraldcorp.com