South Korea

Intelligence for Better Decision Making

Naver and Kakao Accelerate AI-Driven Infrastructure Development to Support Next-Generation Services
Nov. 18, 2025 | Technology & Innovation

Cloud computing platforms and data centers are evolving rapidly to meet the demands of expanding AI workloads.

**Naver invested 1.6262 trillion won in R&D during the first three quarters of 2025, a 19.6 percent increase from the same period last year, putting it on track to surpass 2 trillion won for the full year.**
The company is pursuing 151 distinct R&D projects, many aimed at creating AI agents for shopping, video services, DevOps tools driven by large language models, and browser-based interactions.

**Over the same period, Kakao spent 962.6 billion won on R&D, a 0.9 percent decline from 2024, yet it expects to match or exceed its 2024 full-year R&D total of 1.2696 trillion won.**
Kakao’s research chiefly focuses on building an AI agent ecosystem that integrates seamlessly with its flagship KakaoTalk messaging platform.

**Both companies have boosted infrastructure outlays to sustain AI workloads.**
In Q3, Naver directed 218.6 billion won to GPU-related infrastructure, up 22.7 percent year-on-year, and plans to invest 1 trillion won in overall infrastructure this year, followed by another 1 trillion won earmarked for GPUs in 2026. In the same quarter, Kakao raised its infrastructure and outsourcing spending by 34 percent to 261 billion won, driven by enhancements to its AI service infrastructure and projects tied to SM Entertainment.

**Naver and Kakao each reported record revenue and operating profit in Q3 2025, and both management teams have pledged to channel those gains into further technology development.**
They aim to accelerate AI integration in the second half of the year and roll out “AI agents” as core service offerings next year, leveraging advanced large language models and expanded GPU capacity to provide personalized, real-time assistance in e-commerce, content delivery, and communications.

**At recent industry conferences, Naver’s CEO Choi Su-yeon introduced the “AgentN” strategy, which unites multiple AI agents into a single platform covering search, commerce, and messaging.**
Kakao’s CEO Jung Shin-a outlined sweeping AI upgrades for KakaoTalk and other services, emphasizing context-aware, agent-based user experiences. Both executives stressed that proprietary AI models and large-scale compute capacity are vital to delivering these next-generation capabilities.

**Academic and industry experts view these investments as a strategic move toward technological self-reliance and market leadership in AI.**
Korea University professor Lee Seong-yeop argued that building interoperable ecosystems—linking search, commerce, and messaging through robust computational infrastructure, proprietary large language models, and real-time personalization—is critical for maintaining long-term competitiveness in the rapidly evolving AI landscape.
Semiconductor-Led Industrial and Export Growth Drives South Korea’s Third Quarter Economic Gains
Nov. 18, 2025 | Macroeconomics & Growth

South Korea’s industrial output in the third quarter of 2025 showed robust gains across manufacturing, retail and services, supported by strong export demand and targeted government measures.

South Korea’s industrial production rose 5.8 percent year-on-year in the third quarter of 2025, reflecting continued momentum in key manufacturing sectors and bolstering overall economic performance for the period.

**The semiconductor and electronics sector drove industrial growth, with output climbing 16.5 percent in July–September.**
Automobile manufacturers also boosted production, which increased 7.5 percent over the same period, demonstrating the strength of the country’s export-oriented manufacturing base.

**Regionally, North Chungcheong Province led all areas with a 19.1 percent year-on-year increase in industrial output, followed by Gyeonggi Province at 15.9 percent, both benefiting from dense concentrations of chip fabrication and electronics assembly facilities.**
In contrast, production contracted in Seoul, South Jeolla Province and Jeju Island, reflecting uneven regional industrial dynamics.

**On the domestic front, retail sales rose 1.5 percent year-on-year in the third quarter, aided by government cash handouts designed to spur private consumption.**
Sejong recorded the largest increase at 8.8 percent, while Incheon and Daegu saw gains of 5.5 percent and 5.3 percent, respectively. Seoul and Jeju experienced declines of 2.7 percent and 1.3 percent.

**The service sector expanded 3.1 percent nationwide in the third quarter, led by Seoul’s 6.1 percent growth.**
Ulsan and Gyeonggi Province followed with increases of 5.3 percent and 4.9 percent, demonstrating the ongoing recovery in domestic services demand and urban economic activity.

**Exports grew 6.5 percent year-on-year in the third quarter of 2025 as strong global demand drove shipments of semiconductors, ships and automobiles.**

Monitored Intelligence for South Korea - Nov. 19, 2025


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Hyundai Motor launches 1st group-level cyberthreat team: sources

Yonhap | English | News | Nov. 19, 2025 | Cyber Attacks and Data Loss

Hyundai Motor Group has established its first centralized cyberthreat response team to address rising cybersecurity risks across its various industrial sectors. The team, led by Yang Ki-chang, head of the group's Integrated Security Center, will manage vulnerability assessments, threat monitoring, and incident responses for all Hyundai affiliates. This initiative replaces the previous approach where individual units handled cyberattack responses separately.

The creation of this group-level team aims to prevent industrial hacking incidents, which have been prevalent recently in sectors such as telecommunications, from affecting Hyundai's affiliates. It also prepares the group for long-term cybersecurity risks associated with internet-connected electric vehicles. Hyundai Motor Co. and Kia Corp., the group's primary automotive units, have significantly increased their cybersecurity investments, spending a total of 62.14 billion won (US$42.5 million) in 2025, marking a 46.1 percent increase from 2024.

Industry experts highlight that cyberattacks on connected cars could extend beyond vehicles to compromise related network systems, posing direct safety risks to drivers and pedestrians. As a result, enhancing cybersecurity for connected and electric vehicles has become essential for Hyundai Motor Group's ongoing product development and safety strategy.

카카오 4년만에 근로감독 착수…“성실히 협조”

Kakao undergoes labor inspection for the first time in 4 years, cooperates diligently

Maekyung | Local Language | News | Nov. 19, 2025 | Regulatory Enforcement Actions

Kakao is undergoing a labor inspection by the Ministry of Employment and Labor for the first time in four years, following employee reports of excessive working hours during a major KakaoTalk overhaul. The inspection was initiated after the Kakao Union submitted a petition on September 15, alleging that employees worked beyond the statutory 52-hour weekly limit despite the company’s selective working hours system. The union also claimed that workplace harassment occurred as some executives pushed for a two-month advance project timeline.

The overhaul included significant changes to KakaoTalk, such as converting the Friends tab to a feed format, adding short-form content, creating a new "Now" tab, and introducing "ChatGPT for Kakao." The labor inspection will evaluate long working hours, the operation of the selective working hours system, vacation and holiday policies, workforce management, and potential violations including wage arrears.

In 2021, Kakao faced a similar petition-based inspection that revealed multiple violations of labor laws, such as employees working over 52 hours weekly, overtime work for pregnant employees, and delayed payment of overtime wages for resigned staff. Kakao has stated it will cooperate sincerely with the current inspection.

The IT industry in South Korea has been criticized for entrenched overtime practices tied to project deadlines and frequent service updates. Past investigations showed a majority of game company workers exceeded overtime limits. With Kakao under scrutiny, there are concerns that labor inspections may extend to other IT firms, including mid-sized companies and startups. Heightened competition to incorporate AI technologies is noted as a factor intensifying the long working hours culture.

Hyundai Motor launches 1st group-level cyberthreat team: Sources

Joongang Ilbo | English | News | Nov. 19, 2025 | Cyber Attacks and Data Loss

Hyundai Motor Group has established its first group-level cyberthreat response team in response to increasing cybersecurity risks across various industries. The new team, led by Yang Ki-chang, head of the group's Integrated Security Center, will manage vulnerability assessments, threat monitoring, and incident responses across all Hyundai affiliates.

Previously, individual Hyundai Motor Group units handled cybersecurity incidents independently, making this the first centralized effort to coordinate cyberdefense. The move aims to prevent the spread of industrial hacking incidents, which have recently impacted the telecom sector, from affecting Hyundai's subsidiaries and to prepare for long-term risks associated with internet-connected electric vehicles.

Hyundai Motor and Kia have significantly increased their cybersecurity investments, totaling 62.14 billion won ($42.5 million) in 2025, a 46.1 percent rise from the previous year. Industry experts emphasize that cyberattacks on connected cars pose risks not only to vehicles but also to related network systems, potentially endangering the safety of drivers and pedestrians, highlighting the growing necessity of automotive cybersecurity.

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