Major IT Industry Issues in 2023
The emergence of ChatGPT, a generative artificial intelligence (AI) developed by the US-based OpenAI, has ushered in a period of AI upheaval worldwide. The curtain has risen on the AI hegemony war, and domestic companies have also jumped in. However, the atmosphere among our IT companies responding to this AI upheaval has been gloomy this year. Warning signs of management crises sounded everywhere, and a wave of layoffs swept through.
Kakao Faces Its Biggest Crisis Since Founding
In 2023, Kakao faced its greatest crisis since its founding. The management was arrested amid allegations of stock price manipulation during the acquisition process of SM Entertainment. Kakao Mobility was embroiled in a monopoly controversy, to the extent that President Yoon Suk-yeol personally pointed out the issues. Amid a turbulent period struggling to manage external pressures, internal conflicts also erupted. Internal whistleblowing about management practices surfaced, escalating into a battle over the truth and deepening internal strife.
To manage this, Kakao's founder and Management Innovation Committee Chairman Kim Beom-su engaged in dialogue with employees for the first time in 2 years and 10 months to ease tensions. Soon after, Jeong Shin-ah, CEO of Kakao Ventures, was appointed as Kakao's next CEO, signaling a personnel overhaul. There are many pressing tasks, including appointing CEOs and key executives of affiliates, improving corporate culture, AI development, and challenging global markets, but resolving them does not seem easy.
OpenAI's Failed Coup and Google's Advance
In November this year, Sam Altman, CEO of OpenAI and known as the 'father of ChatGPT,' was suddenly fired. Four out of six board members agreed, and through a video conference, he was unilaterally notified of his dismissal. The board judged that OpenAI's founding purposes of pursuing AI 'ethics' and 'non-profit' were being undermined by Sam Altman.
However, the coup did not last long. Microsoft (MS) declared it would form a new AI research team by gathering Sam Altman and employees opposing his dismissal. OpenAI was thrown into turmoil, and ultimately, he returned five days after being fired.
Meanwhile, Google unveiled its next-generation massive AI, 'Gemini.' Gemini can recognize images and speak or listen through voice. It also possesses reasoning abilities to solve math problems and analyze data.
Thriving IT Faces Wave of Voluntary Layoffs
During the COVID-19 period, competition to attract talent was fierce in the IT industry, but this year a wave of layoffs swept through. The trend of workforce reductions, carried out both domestically and internationally, is expected to continue for the time being.
AWS Korea, the Korean branch of Amazon Web Services (AWS), implemented voluntary layoffs in May this year, and Meta Korea also conducted restructuring around the same time. Earlier, Google Korea and Microsoft Korea notified internal layoff candidates of voluntary resignation. These companies conducted restructuring targeting branches worldwide, not just in Korea.
Kakao also carried out voluntary retirement mainly among its core subsidiaries. Kakao Entertainment implemented the Next Chapter Program (NCP) in June, encouraging employees with over 10 years of service to consider job transfers or career changes. The gaming industry also undertook restructuring for workforce efficiency. NCSoft and Netmarble have been reducing their size by conducting layoffs at overseas subsidiaries such as NCWest and Jam City, respectively.
Naver Launches 'HyperCLOVA X'
Naver unveiled its AI 'HyperCLOVA X' in August to compete against OpenAI, Google, and others. It is the most advanced AI among those released by domestic companies. Naver has started offering the AI-based search service 'Q:'. Through integration with Naver's specialized (vertical) services such as shopping and local, it plans to enhance user satisfaction.
Speed is also picking up in the B2B (business-to-business) sector where AI can generate revenue. Many companies have already started utilizing Naver's HyperCLOVA X. In November, Naver began operating its second proprietary data center, 'Gak Sejong.' Gak Sejong, a massive data center equivalent to 41 soccer fields, will be used to advance HyperCLOVA X and lay the foundation for global expansion.
Game Companies Shaken by 'Jipge Son' Gesture
The gaming industry was thrown into turmoil over a hand gesture in Nexon's game 'MapleStory.' The gesture resembled the 'jipge son' (claw hand) symbol, which is associated with misogyny. When it was revealed that the problematic character video was predominantly produced by a specific studio, user protests surged. Nexon issued an apology, but the subcontracted studio denied the allegations, spreading the controversy further.
Some are framing this hate expression controversy as a gender conflict between men and women. Game companies, including Nexon, are visibly unsettled. There is a high possibility that similar hand gestures in their game character videos could spark backlash. Consequently, game companies have started reviewing all character videos. This is a preemptive move before the controversy spreads further. Since gender issues are particularly sensitive in Korea, related controversies are expected to continue into next year.
Twitch Withdraws from Korean Market
The globally popular game streaming platform Twitch has announced its withdrawal from the Korean market. From February 27 next year, Korean users will no longer be able to use Twitch. Twitch explained that operating in Korea is impossible due to network fees that are ten times higher than in other countries.
With Twitch's strong domestic user base announcing its business withdrawal, other platforms such as AfreecaTV and YouTube are expected to gain 'spillover benefits.' In particular, Naver plans to launch a game streaming platform tentatively named 'CHZZK' next year. Twitch has many streamers with millions of followers, so a fierce competition among platforms to attract these streamers is expected three months from now.
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