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Kakao Splits to Launch Kakao AI, Doubling Down on AI

Kakao, South Korea's internet giant, is making a bold move to put artificial intelligence at the center of its future. On August 21, the company's board approved a plan to split the business into two separate entities: a new company called Kakao AI, which will focus on KakaoTalk and AI, and the existing company, which will be renamed Kakao X and handle investments, fintech, content, and mobility.

This restructuring is more than just a corporate reshuffle. It's a strategic bet that AI deserves its own playground, separate from the sprawling empire of services Kakao has built over the years. By creating two independent companies, Kakao hopes to give each business the agility and focus it needs to thrive.

According to the plan, the split will be based on net asset book value, with Kakao AI taking 36% and Kakao X taking 64%. Existing shareholders will receive shares in both companies in proportion to their current holdings, so no one gets left behind.

Kakao AI's mission is clear: to transform KakaoTalk from a simple messaging app into an "AI interface with intelligent agents." With about 50 million users, KakaoTalk is already a daily habit for many Koreans. The idea is to make it smarter, able to understand what you mean and what you need, and then connect you to services like search, shopping, payment, and recommendations—all through natural conversation.

Imagine asking your chat app to find a good restaurant nearby, book a table, and split the bill with friends—all without leaving the conversation. That's the kind of experience Kakao AI is aiming for.

The timeline is ambitious. Kakao plans to hold a special shareholders' meeting on December 17, 2026, to approve the split, and then complete the separation on January 1, 2027. After that, Kakao AI is slated to be re-listed on January 27, 2027, with Kakao X following suit. Of course, these dates could shift depending on regulatory approvals and other procedural hurdles.

This move signals a major shift in how Kakao views AI. No longer just a feature within its apps, AI is being elevated to a standalone growth engine. By leveraging KakaoTalk's massive user base, Kakao AI aims to become the smart gateway to everyday digital life.

It's a bold experiment, and one that could reshape the competitive landscape in South Korea's tech sector. Whether it pays off remains to be seen, but one thing is certain: Kakao is betting big on AI, and it's willing to restructure its entire business to make it happen.

Key Points

  • Kakao's board approved a split into Kakao AI and Kakao X.
  • Kakao AI will focus on AI and KakaoTalk, aiming to turn it into an AI-powered interface.
  • The split ratio is 36% for Kakao AI and 64% for Kakao X, based on net asset book value.
  • Shareholders will receive shares in both companies proportionally.
  • The split is expected to complete by January 1, 2027, with re-listing planned for late January 2027.