Kakao Forges AI Future with Google Partnership, Reports Record Earnings
Kakao, South Korea’s leading mobile platform, is poised for a new era of growth fueled by a strategic alliance with Google and a surge in artificial intelligence (AI) adoption, according to a recent company announcement. The tech giant, which surpassed 8 trillion won in annual sales for the first time in its history last year, is betting heavily on AI monetization and has outlined a clear path to capitalize on its 50 million daily users.
Expanding AI Reach Through Google Collaboration
Kakao CEO Chung Shin-ah revealed the deepened cooperation with Google during the company’s 2025 first-quarter and annual performance call on February 12th. The partnership centers on advancing Kakao’s on-device AI capabilities by directly collaborating with Google’s Android development team. This synergy aims to combine Kakao’s extensive user data with Google’s platform expertise, creating a powerful competitive advantage.
Beyond mobile, Kakao is also exploring new form factors for its AI services. “We are starting collaboration on Google AI Glass, which will be released in the future,” stated the CEO, signaling an expansion of Kakao AI to wearable devices as a user assistant. Furthermore, Kakao is in discussions to operate a significant-scale TPU (Tensor Processing Unit) cloud through Google Cloud, leveraging its position as a leader in TPU utilization within South Korea. This move is expected to address GPU supply constraints and build a more cost-effective AI infrastructure.
User Engagement Soars with ‘Kanana’ and ‘ChatGPT for Kakao’
Kakao’s proprietary AI brand, Kanana, has demonstrated strong user engagement since its initial rollout. Beta testing of “Canana in KakaoTalk” for iOS users showed an impressive 80% overcoming the model download hurdle, with 70% continuing to use the service. Notably, over 60% of user interactions began with “Sun Talk,” where the AI initiates the conversation, indicating a shift from a simple tool to a more engaging, companion-like experience.
The launch of ChatGPT for Kakao in October has also been a resounding success, attracting 8 million users within its first quarter. This integration is demonstrably increasing user time spent on KakaoTalk, with internal analysis revealing an average daily increase of approximately 4 minutes per user. Kakao anticipates this trend will help achieve its goal of a 20% increase in user residence time, a target set early last year.
Financial Performance Reflects Strategic Focus
Kakao’s annual consolidated sales reached 8.0991 trillion won in 2024, a 3% increase year-over-year. Operating profit saw an even more substantial jump, rising 48% to 732 billion won. This performance is attributed to a focused strategy of streamlining operations – reducing the number of affiliates from 150 to 94 – and concentrating on core businesses, particularly AI and Talk Biz.
The fourth quarter of 2024 further underscored this positive trajectory, with consolidated sales reaching 2.1332 trillion won (a 9% year-over-year increase) and operating profit surging 136% to 203.4 billion won, setting a new quarterly record.
Talk Biz proved to be a key driver of growth, generating 627.1 billion won in sales during the fourth quarter, a 13% increase. Advertising sales rebounded strongly, climbing 16% to 373.4 billion won, while business messaging and display advertising experienced growth rates of 19% and 18%, respectively. The commerce sector also saw a 12% increase, with consolidated transaction volume exceeding 3 trillion won for the first time in a quarter, and gift transactions increasing by 14%.
Looking Ahead: AI Internalization and Agent AI Ecosystem
Kakao has set ambitious targets for 2025: achieving more than 10% annual sales growth and a 10% operating profit ratio. To achieve these goals, the company is prioritizing the internalization of its AI technology. Plans include expanding the application of its expert mixed structure model, Canana MOE (32 billion parameters), and the multi-modal model, Canana Omni, to live services. Kakao’s orchestration bench dataset was recently recognized by ICLR 2026, a leading international AI conference, further validating its technological capabilities.
A key focus for the coming months is the expansion of the Agent AI ecosystem. Kakao intends to partner with at least three leading global and domestic vertical commerce players within the first half of 2025 to create a service where AI directly assists users with shopping and payments within conversational contexts.
“Based on the energy we accumulated last year, we will begin in earnest this year to transform our contribution to growth,” emphasized CEO Jeong. “We will not only show short-term visible performance improvement, but also mid- to long-term growth as tangible results.”
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