Active AI Investments by Korea's Big 3 Education Companies: Kyowon, Woongjin Thinkbig, Daekyo
Integrating ChatGPT into Their Educational Services
Edutech Startups Also Rapidly Adopting ChatGPT-Based Technologies
Domestic education companies are going all out to integrate 'ChatGPT' into their existing businesses. Companies are investing heavily with the expectation that generative artificial intelligence (AI) will play a key teacher role that determines children's learning capabilities, beyond just being a simple learning aid. Even conservative companies that hesitated to change during the Edu-Tech boom sparked by COVID-19 are now rushing to adopt the technology.
Among the domestic 'Big 3' education companies?Kyowon, Woongjin ThinkBig, and Daekyo?Woongjin ThinkBig was the first to take action. In mid-month, Woongjin ThinkBig held a media conference to announce its generative AI adoption strategy. The plan is to apply generative AI to its flagship AI learning platform 'Woongjin SmartAll' and its metaverse (extended virtual world) implementation 'SmartAll Metaverse.' The idea is for students to acquire customized knowledge suited to their level by interacting with a tutor powered by generative AI on the learning platform. A Woongjin ThinkBig official said, "We are currently collaborating with ChatGPT and Naver HyperCLOVA X," adding, "We expect to launch a service linked with generative AI around July this year."
Woongjin ThinkBig is one of the most agile large domestic education companies in terms of digital transformation. It declared digital transformation as early as 2014, before Edu-Tech gained significant attention due to COVID-19, and quickly reorganized its existing business by establishing an IT development office in 2016. Supported by its Edu-Tech capabilities, it pushed Daekyo to third place in sales in 2020 and is closely trailing industry leader Kyowon. Last year, it recorded sales of 933.2 billion KRW and operating profit of 27.5 billion KRW, putting it on the verge of joining the trillion-KRW club.
Kyowon is also pursuing plans to apply ChatGPT to its learning brands. Currently, Kyowon's AI and DX (digital transformation) division within its Technology Innovation Center is collaborating with external companies. Kyowon plans to first link ChatGPT to the realistic AI tutor within its AI learning paper AiCANDO. AiCANDO is an AI learning paper that enables curriculum-linked customized learning in a virtual classroom implemented via metaverse. The AI tutor is a virtual teacher created by video synthesis of real people using realistic AI technology. For hyper-personalized learning, the tutor analyzes learning habits, attitudes, and emotions. A Kyowon official explained, "We are currently conducting feasibility verification for applying ChatGPT," adding, "It will be applied in a way that enhances the scope of the AI tutor's knowledge and the quality of its responses."
Kyowon's education division sales last year were 1.05 trillion KRW, slightly down from 1.0815 trillion KRW the previous year. Although sales have somewhat stagnated despite the Edu-Tech boom, Kyowon is increasing its investment in the Edu-Tech sector to enhance competitiveness. Kyowon's Edu-Tech R&D expenses were 25 billion KRW in 2020, 33 billion KRW in 2021, and 40 billion KRW in 2022. This year, it plans to invest about 50 billion KRW.
Daekyo, rather than directly linking ChatGPT to its own business, is seeking opportunities by investing in AI companies. In 2021, Daekyo made a strategic equity investment (SI) in the education startup TwoBlockAI, which developed the AI writing correction service 'KEEwiT.' TwoBlockAI registered two patents last month related to generative AI utilization methods. The 'Soluni Reading 1200' program released by Daekyo the same month incorporates TwoBlockAI's technology. Soluni Reading is a reading comprehension improvement program that quantifies learners' reading levels into an index. A Daekyo official said, "We also plan to expand the use of AI technology into senior business areas, such as diagnostic programs that can detect dementia early."
Daekyo's sales last year were 683 billion KRW, a 7% increase from 638.3 billion KRW the previous year. However, it recorded an operating loss of 50 billion KRW, a 76.6% increase in deficit compared to 28.3 billion KRW the year before. This loss is analyzed to have resulted from the delayed transition to Edu-Tech compared to other companies like Woongjin ThinkBig and Kyowon. Regarding the cause of the deteriorated performance, Daekyo explained that it increased investments in marketing and digital transformation to strengthen brand competitiveness.
Education startups are also rushing to adopt ChatGPT one after another. SpeakEasy Labs, which operates the AI voice recognition-based English learning application 'Speak,' developed a ChatGPT-4-based AI tutor on the 16th. This service allows free talking in English with AI. The AI understands situations, context, and atmosphere to provide an experience similar to conversing with a native speaker. Artificial Society, a company providing English problem generation management solutions, announced on the 14th that it completed 'eduGPT' by training ChatGPT with hundreds of thousands of educational data it owns. EduGPT is a service that automatically generates passages and questions by selecting vocabulary appropriate for each grade level from Artificial Society's educational data. It supports both Korean and English.
Despite the declining school-age population, the domestic Edu-Tech industry is expected to steadily grow due to advances in generative AI technologies like ChatGPT. The Korea Edu-Tech Industry Association forecasts that the domestic Edu-Tech market sales will expand from 7.325 trillion KRW in 2021 to 9.9833 trillion KRW by 2025.
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