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. 15, 2025


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S. Korea, Philippines to push for cooperation in infrastructure development

Yonhap | English | News | Oct. 15, 2025 | UndeterminedBizdev-Partnering

South Korea and the Philippines are seeking to enhance cooperation in infrastructure development, focusing on smart cities and water management. This initiative was highlighted during a forum held in Manila, where around 30 Korean companies engaged with Filipino authorities from the transport and energy ministries to discuss potential collaboration projects.

The event aimed to facilitate opportunities for Korean engineering, procurement, and construction companies to participate in the Philippines' state-led infrastructure development efforts in transportation, energy, and water management sectors. Korean firms showcased advanced water management and smart city platforms utilizing artificial intelligence and digital twin technologies to the Filipino government.

"북한은 군단급 해킹 조직 운영...정보보호 예산 줄어 우려"

North Korea operates corps-level hacking groups... Concerns arise as information security budget decreases

ZD Net Korea | Local Language | News | Oct. 15, 2025 | North Korea

On October 13, during an audit at the National Assembly Science, ICT, Broadcasting and Communications Committee, concerns were raised over the Ministry of Science and ICT's information security budget. Park Chung-kwon of the People Power Party highlighted a decrease in the cyber and information protection budget, arguing that it was inadequate given North Korea's aggressive cyber activities using advanced technologies like deepfakes. He cited budget documents showing a reduction in hacking and virus response system funding for the next year by about 24.8 billion won compared to the current year.

The Ministry of Science and ICT responded that while some specific project budgets had ended due to completion, the overall information protection budget had actually increased by 7.7% for the 2026 budget proposal, reaching 401.2 billion won. This reflects the launch of new initiatives such as an AI-based intrusion response system and continued investments in quantum-resistant cryptography and information protection professional training. The ministry emphasized a general upward trend in the information security budget over recent years despite a slight dip in 2025.

Next year's budget includes allocations of 15 billion won for AI intrusion response system development, 3.6 billion won each for AI ecosystem security technology and quantum-resistant cryptography development, and increased funding for ongoing projects like core information protection technologies and cryptography promotion. These investments aim to strengthen national cybersecurity capabilities in response to growing external threats from sophisticated hacking groups.

Gov't rejected request to increase police personnel at embassy in Cambodia: lawmaker

Yonhap | English | News | Oct. 15, 2025 | UndeterminedPolitics and Elections

The South Korean interior ministry rejected a request by the foreign ministry last year to increase police personnel at the South Korean Embassy in Cambodia. The request was initially made to address the rising crimes targeting South Koreans in Cambodia, but the interior ministry determined that the workload and number of cases did not justify additional personnel.

Crimes against South Koreans in Cambodia have surged sharply, with official data showing an increase from 81 cases in 2022 to 134 in 2023, and 348 cases last year. In the first half of 2025 alone, 303 cases have already been reported. The current police team at the embassy in Phnom Penh consists of one official and two assistants, who were dispatched in October last year and September this year.

The issue gained national attention following the torture and death of a South Korean college student in Cambodia, which prompted a governmentwide response including congressional audits and calls for stricter measures. The South Korean government has also summoned the Cambodian ambassador, upgraded travel advisories, and is seeking improved cooperation with Cambodian authorities to protect its nationals and prevent further crimes.

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