Kakao to spin off KakaoAI, targets 6 trillion won by 2030

Kakao Corp will spin off its chat app platform business into a new company, KakaoAI, targeting 6 trillion won in revenue by 2030, as it seeks to unlock value from its core platform and investment arms.

The split is designed to address a conglomerate discount and strengthen business specialization, Kakao said in a regulatory filing Friday, with the new entity expected to relist on the Korea Exchange on Jan 27, 2027, following a planned Jan 1 split.

KakaoAI will focus on AI, advertising, commerce and the KakaoTalk chat app platform, while KakaoX will manage and develop holdings in areas including fintech, content and mobility. Kakao set 2030 targets of 6 trillion won or more in revenue and an operating margin above 30 percent for KakaoAI, while targeting 10 trillion won or more in revenue for KakaoX. Kakao reported consolidated revenue of 8.1 trillion won in 2025.

The restructuring separates Kakao's core platform business from its investment portfolio, potentially unlocking shareholder value by giving investors a focused AI-driven entity while isolating investment risk under KakaoX. The company also pledged 300 billion won of share buy-backs and cancellations over three years after the split, a move that could support the stock price as the new entity prepares for its 2027 relisting.

The spin-off marks one of the most significant corporate restructurings in South Korea's technology sector in recent years. Kakao, which operates the country's dominant messaging app with tens of millions of daily users, has faced persistent criticism over its sprawling conglomerate structure, a factor that has weighed on its valuation relative to its individual business units.

The planned split follows a period of governance challenges for Kakao, and the restructuring appears designed to create clearer accountability and focus for each business line. KakaoAI will house the company's most valuable assets — the KakaoTalk platform, its AI initiatives, advertising business and commerce operations. These are the businesses that generate the bulk of Kakao's revenue and user engagement. KakaoX, by contrast, will function as a holding company managing stakes in fintech, content and mobility ventures, many of which are at various stages of maturity.

The 2030 targets are ambitious. KakaoAI's goal of 6 trillion won in revenue would represent a significant increase from the company's current consolidated revenue of 8.1 trillion won in 2025, especially considering that KakaoX would also need to generate 10 trillion won. Combined, the two entities would need to nearly double the company's current revenue base within five years.

The 300 billion won buyback program, spread over three years following the split, represents a commitment to returning capital to shareholders. This is notable for a company that has historically prioritized growth investments over shareholder returns.

The relisting timeline is also significant. The planned Jan 27, 2027 listing on the Korea Exchange would give investors a pure-play exposure to Kakao's AI and platform businesses, potentially commanding a higher valuation multiple than the current conglomerate structure allows.

The spin-off also reflects broader trends in South Korea's technology sector, where conglomerates have increasingly pursued restructuring to improve governance and unlock value. The move comes as Korean tech companies face intensifying competition from global AI players and domestic rivals, making operational focus a competitive advantage.

For investors, the spin-off creates two distinct investment propositions. KakaoAI offers exposure to the company's core messaging platform, AI initiatives and advertising business — the revenue engines that drive most of Kakao's value. KakaoX, meanwhile, provides a vehicle for the company's venture portfolio, which includes stakes in fintech, content and mobility companies at various stages of development.

This article is for informational purposes only and does not constitute investment advice.