South Korea

Intelligence for Better Decision Making

Kakao Accelerates Corporate Streamlining and AI-Centric Reforms Amid Governance and Market Challenges
Oct. 14, 2025 | Firms

Kakao is overhauling its corporate structure and technological strategy to enhance governance, streamline operations and drive growth.

**Kakao cut its group affiliates by roughly 30 percent over two years, reducing the number from 142 in September 2023 to 99 as of October 2025.**
Under CEO Chung Shin-a’s leadership, the company aims to shrink its affiliate count further to about 80 by year-end. This consolidation supports a broader strategy to strengthen governance, improve operational efficiency and concentrate resources on core business areas.

**Alongside the affiliate reduction, Kakao has implemented governance and operational reforms in response to criticism over unfair business practices and executive misconduct.**
Regulators fined Kakao Mobility for allegedly inflating sales figures and abusing its market position in ride-hailing, and founder Kim Beom-su faced indictment for alleged stock-price manipulation linked to Kakao Entertainment’s acquisition of SM Entertainment. At the same time, a major redesign of KakaoTalk triggered strong user backlash, prompting the company to roll back Instagram-style feeds and reinforce transparent, responsive communication with its user base.

**Despite broader economic headwinds, Kakao reported an operating profit of 185.9 billion won in the second quarter of 2025—a 39 percent increase year on year and its highest quarterly profit on record.**
Steady growth on the KakaoTalk platform, improved profitability across its remaining affiliates and deliberate efforts to build a stable financial structure independent of one-off gains all contributed to this performance.

**Looking ahead, Kakao plans to place artificial intelligence at the center of its growth strategy.**
By the end of October 2025, the company will launch “ChatGPT for Kakao,” developed in partnership with OpenAI, allowing users to access ChatGPT directly within the KakaoTalk interface. It will also introduce “Kanana in KakaoTalk,” an on-device AI feature that runs lightweight models locally on smartphones. Additional AI ecosystem efforts include the Context Protocol (MCP) and an agentic AI platform designed to connect external services, all intended to deliver personalized AI experiences to more than 50 million users.

**To support these strategic and technological initiatives, Kakao expanded its total shareholder return–linked compensation program to include all executives and established a five-year, 50 billion won AI education program in collaboration with leading Korean science and technology institutes.**
The company also launched a Small Business Integrated Support Task Force to provide customized consulting for small business owners, reflecting its commitment to responsible management and stakeholder engagement.
Pentagon Launches $1 Billion Mineral Stockpile Drive Amid Supply Chain Concerns
Oct. 14, 2025 | Energy & Natural Resources

The US Department of Defense is expanding its reserves of essential minerals to strengthen national defense capabilities.

**The Defense Logistics Agency has launched a procurement initiative of up to $1 billion to build strategic stockpiles of critical minerals for defense applications.**
It plans to purchase $500 million of cobalt, $245 million of antimony, $100 million of tantalum, and $45 million of scandium. The agency is also exploring acquisitions of rare earth elements, tungsten, bismuth, and indium, with some of those metals included for the first time under this program.

**These minerals serve as vital components in advanced weaponry, radar installations, and missile detection and guidance systems.**
As of 2023, the DLA’s existing inventory stood at approximately $1.3 billion in mineral assets. This new procurement push stems from provisions in the Trump administration’s tax-cut legislation (the Bipartisan Budget Act), which allocates $7.5 billion for critical mineral initiatives: $2 billion for Department of Defense stockpiling between late 2026 and early 2027, $5 billion for broader domestic supply chain investments, and $500 million for a credit facility to spur private‐sector participation.

**A key driver of the initiative is concern over China’s dominance in critical mineral markets and its recent tightening of export controls.**
The Pentagon aims to reduce reliance on a single supplier and improve resilience in its supply chains. Legal and policy analysts warn that any delays or shortfalls in securing these materials could leave gaps in the production and deployment of key defense systems, and they note that the sheer scale of the proposed acquisitions presents significant logistical and financial challenges.

**Market analysts question the feasibility of meeting these targets within the proposed timeframe.**
For example, the planned purchase of 222 tonnes of indium nearly equals US annual consumption of roughly 250 tonnes, and many of the quantities exceed current domestic production and import levels. Observers also caution that large‐scale government buying could drive global mineral prices higher, creating volatility that may complicate procurement for both defense and commercial users if producers cannot rapidly scale output.

Monitored Intelligence for South Korea - Oct. 14, 2025


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Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.

The goal is to provide intelligence that allows decision makers to avoid being blindsided by what they may have missed, while informing them to make better decisions as well.

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North shows off new ICBM, hypersonic short-range missiles at late-night military parade

Joongang Ilbo | English | News | Oct. 14, 2025 | North Korea

North Korea held a late-night military parade on October 10, 2025, in Pyongyang’s Kim Il Sung Square to mark the 80th anniversary of the ruling Workers’ Party. The parade showcased Pyongyang’s latest military advancements, including the newly revealed Hwasong-20 intercontinental ballistic missile (ICBM) and hypersonic short-range missiles like the Hwasong-11Ma. The display emphasized North Korea’s capability to strike targets in both the United States and South Korea, signaling an increased strategic threat.

The Hwasong-20 ICBM, described as a powerful nuclear weapon system, was presented on an 11-axle mobile launcher. Analysts suggest North Korea might be developing multiple independently targetable reentry vehicles (MIRVs) for this missile to bypass U.S. defenses, although the system is likely still in development. The parade also featured strategic cruise missiles from the “Hwasal” series, capable of targeting U.S. assets in the region, and hypersonic glide vehicles designed for enhanced range and maneuverability, comparable in design to Russian and Chinese weapons.

In addition to strategic missile advancements, North Korea displayed modernized conventional weapons, including upgraded tanks, self-propelled howitzers, and a new multiple launch rocket system reminiscent of South Korean and U.S. artillery. A loitering munition drone similar to Israel’s Harop also debuted, reflecting Kim Jong-un’s directive to expand unmanned aerial systems. Analysts interpret the comprehensive weapons display as part of North Korea’s broader effort to project military confidence and strengthen its diplomatic bargaining position amid ongoing international isolation.

Notable foreign dignitaries, including China’s Premier Li Qiang and Russia’s Dmitry Medvedev, attended the parade, indicating continued support from key allies. Kim Jong-un did not directly name adversaries in his speech but emphasized containing threats since the party’s founding. Kim’s daughter, Kim Ju-ae, was absent from the event, having last appeared publicly in China one month prior.

70+ Population Surpasses 20s, Becomes Major Consumers and Taxpayers

Chosun Ilbo | English | News | Oct. 14, 2025 | UndeterminedDemographics

The population aged 70 and above in Korea has surpassed those in their 20s for the first time in history, reflecting accelerating low birth rates and aging. The 70+ demographic reached 6,543,000 in 2024, exceeding the 20s population of 6,302,000. Korea entered a super-aged society last year, with 20% of the population aged 65 or older.

Elderly individuals are becoming major consumers, with total consumption by those aged 65 and above hitting a record 243.8 trillion Korean won in 2023, a 12% increase from the previous year. This growth rate is twice that of the working-age population. Private consumption among the elderly rose 14.9%, driven by spending on leisure, culture, and dining out rather than medical expenses. Active seniors investing in quality-of-life improvements are shifting market dynamics.

Although most elderly are retired and have limited labor income, their consumption is supported by real estate and financial assets accumulated over their lifetimes. Private asset allocation among those 65 and older reached 4.93 trillion Korean won in 2023, the highest ever, with over 85% of household assets in real estate. Consequently, individuals aged 60 and above contribute disproportionately to comprehensive real estate tax, accounting for 57% of payments last year.

Experts note that the rise of the elderly as main consumers and taxpayers reshapes Korea’s economic landscape amid demographic shifts. With a shrinking population of young adults and scarce jobs, the asset-rich elderly are becoming the economic backbone, exacerbating intergenerational economic disparities.

트럼프 “푸틴에 ‘우크라 토마호크 지원’ 경고할수도”…러 “극단적 우려”

Trump says he may warn Putin about supporting Ukraine with Tomahawks… Russia expresses extreme concern

Maekyung | Local Language | News | Oct. 14, 2025 | Geopolitical Conflict and Disputes

U.S. President Donald Trump indicated that he may supply Ukraine with Tomahawk long-range cruise missiles, which have a range of 2,500 km and could potentially strike Moscow from Ukrainian territory. He made these remarks on October 12 while en route to Israel, stating that if the war in Ukraine does not get settled, he plans to send the "incredibly" and "very aggressive" Tomahawk missiles to Ukraine.

This is the first time President Trump has publicly suggested providing Tomahawks to Ukraine, following Ukrainian President Volodymyr Zelensky's earlier request for the missiles. Currently, the U.S. has supplied Ukraine with shorter-range ATACMS missiles (about 300 km), and European countries have provided Storm Shadow missiles with a range of 250 km. U.S. Vice President J.D. Vance confirmed the Trump administration is reviewing Ukraine’s request, with the final decision resting with President Trump.

Russian President Vladimir Putin has expressed serious concern about the potential delivery of Tomahawk missiles to Ukraine, warning on October 2 that such a move could cause a "completely new and qualitatively new level of deterioration" in Russia-U.S. relations.

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