Returning as Chairman at the Shareholders' Meeting on the 26th of Next Month
Focus Expected on Advancing Proprietary AI Model
Performance of 'Korean-style LLM' Likely to Improve Amid Global AI Power Struggle
"Strengthening artificial intelligence (AI) competitiveness and monetization." This is Naver's challenge for this year, following its record-breaking annual sales of 10 trillion won. It is also the reason why Lee Hae-jin, Naver's founder and Global Investment Officer (GIO), decided to return as chairman of the board at the shareholders' meeting scheduled for the 26th of next month. The key question is whether Naver can continue its rapid growth by generating profits in the AI sector with the founder's return.
After his return, Lee is expected to focus primarily on advancing Naver's proprietary AI model, HyperCLOVA X. In 2023, Naver launched HyperCLOVA X, a large-scale generative AI language model (LLM) specialized for Korea, but it has been evaluated as lagging behind global corporate services such as ChatGPT (OpenAI). Although generative AI is leading the global AI paradigm, Naver has not achieved significant results in this area and has fallen behind.
Lee Hae-jin, Naver's Chief Global Investment Officer, appeared as a witness at the National Assembly's audit on the Korea Communications Commission held by the Science, Technology, Information and Broadcasting Committee in October 2021, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@
Lee is known to have a clear conviction about ‘AI sovereignty’ based on the Korean language and culture. Because of this, it is highly likely that Naver will take a different path from Korean companies like Kakao, which have partnered with OpenAI to utilize external large language models (LLMs).
As China's DeepSeek has sparked a ‘cost-effective AI’ competition, proving that high-performance AI models can be developed with relatively small capital, there are also forecasts that Naver will improve the performance of its ‘Korean-style LLM,’ including HyperCLOVA X, through algorithm restructuring.
Naver announced that it will implement on-service AI capabilities across all its services starting this year. Accordingly, it is expected to accelerate the integration of AI into shopping and search services. Naver plans to use AI to enhance personalized product recommendations in ‘Naver Plus Store,’ a personalized shopping service scheduled to be launched as a separate app in the first half of this year. The service will analyze the reasons for product recommendations for each user and visualize them with scores to show consumers.
The key is to embed Naver’s self-developed AI technologies into various services centered around the Naver app?such as search, shopping, advertising, community, Clova Note, and Chijijik?and convert them into revenue. If this business succeeds, Naver will also gain opportunities to export to countries in the Middle East, ASEAN regions, and others that do not have their own AI models.
Naver is also working to secure AI technological capabilities by developing the AI semiconductor ‘Gaudi2’ in collaboration with Intel. Recent analyses have shown that Gaudi2 outperforms Nvidia’s graphics processing unit (GPU) ‘A100’.
Lee has experience of elevating Naver, once a latecomer, to the leading position in the domestic search engine market. In the IT industry, there is anticipation that his return to the forefront of management, based on this experience, will enhance Naver’s competitiveness in the global AI market.
On the 7th, following the announcement of Lee’s return, Naver’s stock price rose to 235,000 won as of 9 a.m. Until the end of last month, Naver’s stock price was below 200,000 won. This is less than half of the peak price of 460,000 won in July 2021. Although sales performance was strong, the stock price did not rise because the market judged that Naver’s AI competitiveness was lagging. However, with the news of Lee’s return, Naver’s stock price is gradually increasing.
Lee served as chairman of the board from 2013 to 2017 before moving to the GIO position. During his time as GIO, he successfully completed acquisitions such as the U.S. C2C (consumer-to-consumer) platform Poshmark and investments in the Spanish secondhand trading platform Wallapop.
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