Kakao will be split into “KakaoAI,” which will oversee artificial intelligence (AI) businesses based on KakaoTalk, and “KakaoX,” which will be responsible for future investments. Through the business split, the company aims to accelerate decision-making and enhance corporate value.

Kakao announced on the 21st that its board of directors had resolved to carry out a spin-off by way of a physical division into a newly established entity, KakaoAI, and a surviving entity, KakaoX. Based on the book value of net assets, the split ratio is 0.36 for KakaoAI and 0.64 for KakaoX, and existing shareholders will receive shares in both companies in proportion to this ratio.

Kakao explained that it decided on this physical division because, as the business scale has expanded and affiliates and business areas have become more complex, it has become difficult to swiftly execute growth strategies for each business under a single decision-making structure. Through the split, the company plans to establish management systems tailored to the characteristics of each business so that the market can independently assess the value of each segment.

KakaoAI will be repositioned as an “AI Core Company” that connects AI, advertising, and commerce centered on KakaoTalk. It will be led by the current Kakao CEO, Jeong Shin-ah. Operating subsidiaries such as DK Techin and K&Works will be placed under KakaoAI.

KakaoAI plans to evolve KakaoTalk into “agentic AI” that understands user context and connects search, recommendation, purchase, and payment. On this basis, the company aims to secure 20 million AI daily active users (DAU) and achieve annual revenue of more than KRW 6 trillion by 2030.

The surviving entity “KakaoX” will function as a “future value investment company” leading key subsidiaries such as KakaoBank, Kakao Pay, Kakao Mobility, and Kakao Entertainment. Kim Do-young, CEO of Kakao Investment and head of the Group Investment Strategy Office of the Kakao CA Council, has been named CEO-designate.

KakaoX plans to utilize investment capital totaling KRW 6.4 trillion, including KRW 2.3 trillion secured through the securitization of owned assets and approximately KRW 4.1 trillion held by subsidiaries, to discover new businesses such as virtual assets and physical AI. Based on this, it aims to build a growth platform capable of generating KRW 10 trillion in revenue by 2030.

Kakao expects that once the two companies’ financial information and performance are evaluated independently after the split, the corporate value will increase. According to Kakao, the average sum-of-the-parts (SOTP) valuation by domestic and global securities firms is around KRW 34.2 trillion, more than double the current market capitalization of approximately KRW 16.8 trillion.

The company will also strengthen shareholder returns. KakaoAI will use 20–35% of its separate adjusted free cash flow (FCF) for shareholder returns, while KakaoX will allocate 30% of dividends received from subsidiaries and 30% of investment gains for the same purpose. Kakao also announced plans to repurchase and cancel treasury shares worth KRW 300 billion using proceeds from the sale of its stake in Dunamu.

Kakao plans to complete the split on January 1, 2027, following an extraordinary general meeting of shareholders on December 17 this year, and to proceed with the relisting of KakaoAI and the relisting under the new name of KakaoX on January 27 of the same month.

Kakao CEO Jeong Shin-ah said, “This split is a decision to transition Kakao to a structure of speed and accountability suited to the AI era,” adding, “KakaoAI and KakaoX will each establish strategies and capital allocation principles aligned with their business characteristics, execute them more quickly, and strive to communicate their results transparently to the market.”

Kakao founder Kim Beom-su said, “As the AI era demands a fundamentally different level of agility, we will redesign the growth structure with the two engines of KakaoAI and KakaoX so that the results can be shared by shareholders, users, and all crew members.”

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