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In September 2023, the Bank of Korea invited NAVER CFO Kim Nam-sun to give a special lecture on the AI trend in the global capital market and industry, as well as the growth trajectory and competencies of NAVER as a leader of Korea’s internet industry. Kim elaborated on the company’s strong foothold and strategies tailored to the Korean market amidst the AI wave currently unfolding in the global landscape.

The global AI market

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The AI wave has been ushering in since 2020. During the first half of 2023, the global stock market saw seven big U.S. tech companies dominate more than two-thirds of its total investment returns. The market forecasts that the industry-wide benefits of enhanced productivity driven by AI will fall to a handful of global tech giants, mainly a few major cloud infrastructure providers, one or two high-performance semiconductor designers, *LLM developers, and AI-based productivity software companies.

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*LLM (Large Language Model): a large-scale language model with a massive number of parameters

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As such, dashing our expectations that the advent of a new AI industry would bring significant benefits to a myriad of players and give rise to new companies, the reality is that increased productivity has further raised the entry barriers that big tech giants had already built. Such a phenomenon is rather paradoxical, as it stands in contrast to other watershed moments in industrial history where the benefits of improved productivity resulting from technological development were distributed quite equally among companies across the industry.

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Against this backdrop, it is worth noting that while the growing importance of a company’s capability to invest heavily in AI research poses a huge threat to those lacking capital, NAVER has continuously prepared the building blocks for the new wave of AI, just like how we successfully rode the past waves during each turning point in the internet industry.

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The strength that enabled NAVER to withstand the past transitions in the internet industry

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Korea’s internet industry has gone through four distinct waves since the end of the 1990s. The first wave saw the rise of various search portal services around the world, but only a few managed to survive. It is all the more meaningful that NAVER ranks number one in the search engine market of a country with an open market economy that does not impose tight cultural restrictions.

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This was possible because NAVER collected more regional and community data through our UGC services, including NAVER Blog, Knowledge iN, and NAVER Café, and secured our foothold in the domestic search market by launching differentiated services based on domestic data that allow users to search in Korean language. Even during the subsequent waves of the mobile transition and expansion of the e-commerce market, we found our own breakthrough and successfully strengthened our footprint to become who we are today.

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The wave of AI upon us

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NAVER has focused on the changes in the global AI market I mentioned earlier to make further investments in AI, and in 2021 we became the third company in the world to launch our own LLM. Only five companies in the world have designed their own LLM that exceeds 100B parameters, and HyperCLOVA X is the only model for which half of the data was trained in the Korean language.

NAVER aims to provide stable LLM first in Korea, and will expand our presence to other countries that do not have their own solutions by training our model on languages they use. Just like how we successfully provided search services catering to the Korean region to establish our foothold, NAVER will continue to provide our own AI-enabled solutions and highly secure neuro-cloud products that are specific to the Korean language, region, and needs. We believe it is the duty of NAVER and the Korean tech industry to make public and private companies in Korea more competitive, and to continue to protect our technological prowess ●