KT "2.4 Trillion Investment in AI and Cloud with MS... No Concerns Over Technology Sovereignty Infringement" (Comprehensive)

Kim Young-seop "Providing Fast Service While Protecting Sovereignty"
GPT-4o-Based Korean AI Development in First Half of the Year
Public and Financial Cloud Commercialization in Q1 Next Year

KT announced a concrete roadmap to jointly invest 2.4 trillion KRW with Microsoft (MS) in the fields of artificial intelligence (AI) and cloud, aiming to develop Korean-style AI and commercialize cloud services for the public and financial sectors next year. In response to concerns that cooperation with MS might lead to losing Korea's technological sovereignty, KT dismissed such worries, saying, "There is no need to worry too much."

Kim Young-seop, CEO of KT, is speaking at the 'AICT Business Strategy Presentation Press Conference' held on the morning of the 10th at 'Novotel Ambassador Seoul Dongdaemun' / Photo by KT

On the 10th, KT CEO Kim Young-seop said at the AICT business strategy briefing held at Novotel Ambassador Seoul Dongdaemun, "I understand that many people are concerned about the risks of cooperating with MS," adding, "MS is globally maintaining sovereignty while continuously providing services not only to KT but also in Europe’s public and financial sectors, so there is no need to worry too much."

He continued, "Bringing in top-level technology while firmly protecting sovereignty and providing products and services as quickly as possible is KT’s contribution and survival strategy."

Regarding the background of the cooperation with MS, CEO Kim stated, "The two companies’ goals aligned well as both were seeking partners to secure competitiveness in the AI and cloud markets, and they shared the business objective of jointly developing and providing a Korean-style AI and cloud model."

Cho Won-woo, CEO of Microsoft Korea, said, "MS is very interested in Korean-style AI," adding, "We believe there is a foundation to create more disruptive AI by combining the industrial expertise of Korean companies." He also expressed confidence that "advanced AI solutions will not only expand MS’s reach but also help KT enter partnership markets."

Jung Woo-jin, Head of KT Consulting Group (Executive Vice President), is presenting the sales forecast for the AX business at the AICT Business Strategy Meeting held on the 10th. Photo by Hwang Seo-yul chestnut@

KT has signed a 5-year partnership contract worth 2.4 trillion KRW with MS. Half of the investment cost will be used for research and development (R&D). The two companies will collaborate on developing Korean language-specialized AI models and services, Korean-style cloud services, and establishing AI transformation (AX) specialized companies. Jung Woo-jin, KT Consulting Group Head (Executive Director), said, "The AX business revenue forecast is expected to reach up to 4.6 trillion KRW cumulatively over five years (2025?2029)."

Korean-style AI based on GPT-4o to be developed by mid-year... Continued development of in-house AI 'Mideum'

The Korean-specialized AI model is planned to be completed by the second quarter of next year, based on GPT-4o. In addition, industry-specific specialized models for public and financial sectors based on the small language model 'Phi 3.5' will also be developed by the second quarter. The Korean-style AI focuses on optimizing for Korea by reflecting domestic data, laws, regulations, culture, and language. To this end, KT has secured relevant data and begun the training process.

Separately from the collaboration with MS, KT will continue developing its own AI, 'Mideum.' Oh Seung-pil, Vice President and Head of KT’s Technology Innovation Division, said, "'Mideum' is not competing with ultra-large AI models but focuses on meeting corporate demands through small language models (sLM). We will sincerely nurture the 'Mideum' line."

Based on this collaboration, KT plans to lead the development of next-generation AI models and AI-related technologies such as Artificial General Intelligence (AGI) and Artificial Super Intelligence (ASI). It is also preparing for future communication technologies like 6G and next-generation IT technologies such as quantum computing.

KT-Microsoft (MS) AI and Cloud Business Collaboration Roadmap
Photo by Seoyul Hwang chestnut@

Cloud commercialization in Q1... "Developing security tailored to Korea"

Joint development of cloud services for the public and financial sectors that comply with domestic regulations will also be pursued, targeting commercialization in the first quarter of next year. Vice President Oh said, "It is difficult to say that everything is ready regarding cloud security," adding, "While much technical preparation has been made, the approach to align with Korean regulations requires joint development."

Regarding concerns about the reduced role of KT’s subsidiary KT Cloud, KT Cloud CEO Choi Ji-woong said, "On the contrary, a foundation for growth will be established." He explained, "KT Cloud provides services to customers from the perspective of a data center and cloud service provider (CSP). Through collaboration between MS and KT, the MS Azure part related to cloud will expand in the data center, and new models will be added to the service portfolio, offering customers more choices."

KT plans to evolve into a ‘total cloud operator’ by cooperating with service partners in the cloud sector to provide enterprise customers with end-to-end services from development to operation, simultaneously acting as both a CSP and a managed service provider (MSP).

Kim Young-seop, CEO of KT (center), Oh Seung-pil, Head of KT Technology Innovation Division (Vice President, left), and Jung Woo-jin, Head of KT Consulting Group (Executive Director, right) are answering questions at the 'AICT Business Strategy Presentation Press Conference' held on the morning of the 10th at 'Novotel Ambassador Seoul Dongdaemun'. Photo by KT

AX specialized company launched as KT subsidiary... Workforce training also underway

At the same time, the two companies will establish and launch an AX specialized company composed of AI and cloud experts as a subsidiary. It plans to provide consulting, architecture, and design services to companies pursuing AX and expand into global markets such as Asia. Executive Director Jung said, "Initially, MS personnel will be intensively involved, and KT will lead the business." CEO Kim added, "We are starting with contracts with global top experts, which will also enhance ecosystem capabilities." An 'AX Strategy Fund' will be jointly established through collaboration with newly formed partner companies.

The jointly established 'Innovation Center' next year will research AI and cloud technologies. KT will conduct joint research on AI and future networks with MS’s research center and expand participation from domestic universities and research institutes. It will also actively invest in AI-related startups both domestically and internationally. To strengthen competitiveness in the existing telecommunications business, joint research on network modernization and 6G, as well as industry-specific AX and joint R&D on GPU and NPU for healthcare and mobility sectors, will be conducted.

To nurture AI and cloud talent, KT and MS will jointly operate capability enhancement education programs in technology, consulting, and marketing for five years.