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Kakao Stock Surges 9%, Then Dips Following OpenAI Partnership

Published
Kurt Robson
Published
By Kurt Robson
Edited by Samantha Dunn
Key Takeaways
  • Kakao has seen its shares decline 2% after formally announcing its partnership with OpenAI.
  • The South Korean chat app operator has plans to develop a new Korean-language assistant called Kanana.
  • The release of the Chinese AI chatbot DeepSeek has cast doubt over the dominance of U.S. AI firms.

Kakao has seen a pullback in its share price after a record surge following the announcement that it was teaming up with artificial intelligence giant OpenAI.

The partnership marks OpenAI’s second significant deal with an Asian company this week as the AI firm looks to make a mark internationally.

Kakao Shares Drop

In anticipation of its link up with OpenAI, Kakao shares surged 9% on Monday to close at 41,800 won, the highest point since December 2024.

However, following Tuesday’s official announcement from Altman and Kakao CEO Chung Shin-a, shares pulled back 2% to 40,700 won.

Kakao Share Price | Source: Google Finance

The two executives said the companies planned to develop a new Korean-language assistant called Kanana, powered by OpenAI.

OpenAI technology will also be integrated into KakaoTalk, South Korea’s largest chat app run by Kakao.

Kakao will also become an enterprise customer of OpenAI, deploying ChatGPT Enterprise internally among its employees.

“Korea is a very impressive market,” Altman said at the press event .

“The adoption of AI in Korea is remarkably advanced. Considering various industries, from energy to semiconductors and internet companies, there is a very strong environment conducive to applying AI.”

“It is a market that is extremely important to us and is growing rapidly,” he added.

OpenAI and SoftBank

The Kakao announcement came just a day after OpenAI and Japanese investor SoftBank unveiled plans to expand their partnership to bring AI to Japanese corporate customers.

CEO Masayoshi Son announced that SoftBank would pay OpenAI $3 billion for unlimited access to its large language models.

The deal builds upon SoftBank’s October 2024 agreement to invest $500 million in OpenAI.

Son has been looking to expand SoftBank’s AI capabilities, previously slamming Japanese companies for not using enough AI.

DeepSeek Spurs Global Expansion

The recent release of DeepSeek, a Chinese AI chatbot understood to be made at a fraction of the cost, has soared in popularity and become a top-downloaded app in the U.S.

DeepSeek’s sudden rise to fame has cast concerns over American AI firms’ global leadership and security as leading powerhouses.

This has likely spurred AI firms such as OpenAI, which makes significantly more expensive large language models, to consider quicker routes to reaching internationally.

If DeepSeek can circumvent regulatory issues and scrutiny, such as personal data protection and copyright, it will have proven how easy it is to break into the U.S. market at a much cheaper price.

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Kurt Robson

Kurt Robson is a London-based reporter at CCN with a diverse background across several prominent news outlets. Having transitioned into the world of technology journalism several years ago, Kurt has developed a keen fascination with all things AI. Kurt’s reporting blends a passion for innovation with a commitment to delivering insightful, accurate and engaging stories on the cutting edge of technology.
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