Kakao Bets on AI Agents to Boost Revenue Amid Performance Struggles
Kakao is turning to AI agents, including a partnership with OpenAI, to drive revenue growth as the company faces financial challenges. Analysts predict these services could generate over 1 trillion won in sales.
Artificial intelligence (AI) agents are emerging as a potential lifeline for Kakao, which has been grappling with poor financial performance. The company is banking on its ultra-personalized AI mate app "Kana" and a new AI agent developed in partnership with OpenAI to drive significant revenue growth.
Key Developments:
- Financial Projections: Kiwoom Securities raised Kakao's target price to 100,000 won, estimating its AI intrinsic value at 12.1 trillion won. The firm projects Kakao Talk-based agents could generate 969.8 billion won in sales by 2027.
- Subscription Model: Analysts predict 1.243 million paid subscribers paying around 65,000 won monthly for AI agent services by 2027.
- Strategic Partnership: Kakao's collaboration with OpenAI is expected to yield a new AI agent capable of handling tasks like restaurant reservations, taxi calls, and payments within Kakao Talk.
Market Expectations:
- Shinhan Investment & Securities forecasts 5 million paid subscribers by end of 2027, generating 570 billion won annually.
- Goldman Sachs projects $801 million (1.1 trillion won) in additional sales from Kakao's AI agent services between 2025 and 2030.
Kakao's AI Agent Initiatives:
- Kana App: A hyper-personalized AI assistant currently in closed beta testing (CBT). Recent updates include enhanced "Reminder" functionality.
- AI Mate Series: Integrates AI agents with existing Kakao services like shopping and local guides.
- OpenAI Collaboration: Developing a new agent expected to launch in 2025 with advanced automation capabilities.
Upcoming Catalyst:
Attention is focused on whether Kakao will disclose additional AI agent plans during its Q2 earnings announcement on August 7. The company is expected to report 1.95 trillion won in sales and 125 billion won in operating profit for Q2 2025.
The success of these AI initiatives could prove crucial for Kakao as it seeks to reverse its recent performance struggles and establish itself as a leader in the AI-powered service market.
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About the Author
Michael Rodriguez
AI Technology Journalist
Veteran technology journalist with 12 years of focus on AI industry reporting. Former AI section editor at TechCrunch, now freelance writer contributing in-depth AI industry analysis to renowned media outlets like Wired and The Verge. Has keen insights into AI startups and emerging technology trends.