[Edaily Reporter Shin Young-bin] The defense Artificial Intelligence Transformation (AX) market is emerging as a new battleground for the domestic cloud industry. Given the nature of the defense sector, which handles sensitive data such as battlefield data, command and control, and surveillance and reconnaissance information, the establishment of closed networks, security certification, data sovereignty, and minimizing reliance on foreign AI have emerged as key competitive factors.

Naver Cloud Takes First Step with Dedicated Defense AX Organization

Naver Cloud held a seminar titled “Sovereign AI-Based Defense AX Development Strategy” at the “InLEX Korea Defense Industry Development Expo” held at the Daejeon Convention Center (DCC) on the 10th, where it unveiled its plans for implementing defense AI. Naver (#NAVER) highlighted its full-stack sovereign AI capabilities, which encompass data centers, cloud infrastructure, AI models, and services.

This strategy announcement is also significant as it marks the first initiative of the dedicated Defense AX organization, which was launched on the 1st under the direct supervision of Kim Yu-won, CEO of Naver Cloud. The organization is led by Yoo Kyung-beom, Executive Vice President of Business Development and Strategy at Naver Cloud.

Senior Vice President Yoo delivered a presentation titled “Defense AX Completed by Sovereign AI: Naver Cloud’s Next-Generation Full-Stack Battlefield Operations Strategy,” outlining plans to apply Naver’s technological assets to the defense sector. Naver Cloud plans to fully enter the defense AI market by combining its proprietary multimodal AI model “Omni” with on-premises cloud solutions and the Field Deployment Engineers (FDE), a field-based engineering team.

At the core of this strategy is the Omni model. It integrates and interprets various forms of battlefield data—including text, voice, video, and maps—into a single operational context, transforming it into actionable intelligence for commanders. Naver Cloud believes that the ability to synthesize reconnaissance footage, operational communications, location data, and sensor data to understand the battlefield situation is critical for Defense AX.

The AI Data Center (AIDC) was also presented as a key pillar. Naver Cloud proposed a plan to integrate and manage data scattered across the Army, Navy, Air Force, and the Joint Chiefs of Staff at a central data center, while deploying edge data centers to forward units, naval vessels, and mobile command posts. This structure enables the processing of field data and support for mission execution even in situations where communications are cut off.

Naver Cloud explained that, based on its experience operating hyperscale data centers and its track record of building container-based modular cloud infrastructure within customer-dedicated closed-network environments, it can provide a defense AI infrastructure that connects from the central hub to the battlefield edge.

As an example of actual battlefield application, they presented an “AI Staff Officer” system designed to assist commanders in decision-making. The AI Staff Officer is a system that collects and analyzes vast amounts of battlefield data to support operational judgment. Naver Cloud’s strategy is to advance this into a defense-specific vertical AI by combining omnimodal AI with an ontology-based knowledge system that structures military doctrine, weapon systems, and defense terminology.

Jeong Nak-soo, Executive Vice President of Naver Cloud, emphasized, “We must transform siloed military data into a knowledge system that understands meaning and context.” He added, “Defense AI is different from general chatbots,” explaining that “an ontology is needed to connect military terminology, concepts, and operational experience.”

Another distinguishing feature is the Field-Deployed Engineers (FDE), a field-oriented engineering team. The FDE is deployed to military sites to quickly identify requirements and support prototype development and validation. The company plans to build an AI operationalization ecosystem that can be utilized in actual combat environments.

Defense AX Market: Next-Generation Growth Engine for the Cloud Industry

Across the domestic cloud industry, there is a growing consensus that the defense AX market represents a next-generation growth engine. The defense sector has higher security requirements than general public clouds, and capabilities in building closed networks, dedicated networks, and private clouds are critical. As generative AI, GPU infrastructure, and data center operational experience are integrated into this, the role of cloud service providers is expanding.

#NHN is also accelerating its push into the defense AX market. An NHN representative stated, “While we have not yet established a dedicated organization, we plan to pursue business initiatives with the defense AX market as a strategic target, including the expanded adoption of Durey’s collaboration tools by the Ministry of National Defense.”

NHN Cloud has announced its policy to set the defense AX market as a strategic target and to fully launch its market offensive based on its capabilities in building and operating private clouds and GPU infrastructure. In particular, it is targeting the highly security-sensitive defense and public sectors by leveraging its GPU infrastructure and private cloud capabilities in the Yangpyeong region.

NHN Cloud is currently participating in the “Joint Command and Control System” performance improvement project, which is being promoted by the Defense Acquisition Program Administration and led by Hanwha Systems. NHN Durey launched its all-in-one AI collaboration tool, “Durey,” to the Ministry of National Defense in 2024 under the name “Gukbang I-eum” and is currently providing the service. The company plans to expand the service to 300,000 personnel across all branches of the military, including the Army, Navy, and Air Force, in the second half of this year.

#KT is also exploring business opportunities in the defense sector. KT Cloud explained, “We classify the defense sector as a specialized public sector and are continuously monitoring business opportunities while preparing to participate in projects.” The company stated that it is particularly focusing on AI-native defense business areas and closely monitoring related trends.

KT possesses experience in building defense ICT infrastructure, including defense broadband integrated networks, maritime satellite communication systems, 5G wireless infrastructure, and next-generation defense integrated data centers. Analysts suggest that if future demand for defense AX expands to focus on closed networks, dedicated clouds, and AI data centers, business opportunities could emerge by combining KT’s existing defense ICT infrastructure experience with its public and security cloud capabilities.

The industry views the competition in defense AI as no longer being solely about model performance. To create AI that functions effectively on the actual battlefield, full-stack capabilities—including the integrated provision of data centers, cloud services, closed-network security, GPU infrastructure, ontology-based knowledge systems, and field deployment capabilities—are expected to be the decisive factor.