Kakao Accelerates 'Downsizing'... Merger of DK Techin and Kakao Brain

Kakao has decided to merge its subsidiaries, the information technology (IT) solutions company 'DK Techin' and the artificial intelligence (AI) company 'Kakao Brain.'

According to the Financial Supervisory Service's electronic disclosure system (DART) on the 25th, DK Techin announced on the 23rd that it plans to absorb and merge Kakao Brain on October 1. The purpose of the merger is to increase management efficiency and strengthen business capabilities.

On the same day, Kakao Brain announced through a disclosure that it plans to establish a company called 'CXR Lab' to spin off its healthcare business.

Kakao Brain's healthcare business division will be spun off and then absorbed by DK Techin.

This merger is interpreted as part of Kakao's ongoing efforts to streamline its operations. Earlier, on the 8th, during the Q2 earnings conference call, CEO Jeong Sin-ah stated, "We define businesses that lack relevance to the KakaoTalk platform or the major trend of AI as non-core, and we will accelerate efficiency improvements for those businesses in the second half."

Kakao's restructuring of its affiliates is expected to continue in the second half of the year. Previously, Kakao reduced 15 affiliates in the first half by withdrawing from businesses such as golf equipment.