[Edaily Reporter Kim Hyun-ah ] Kakao(035720)is reorganizing the board of directors of its newly established subsidiary, “Kakao AI,” ahead of a corporate spin-off. It has been confirmed that Oh Seung-pil (56), former Chief Technology Officer (CTO) of KTCorporation’s Technology Innovation Division, will join Kakao AI as an outside director. Former government officials, including Im Hye-sook, former Minister of Science and ICT (Professor of Electrical and Electronic Engineering at Ewha Womans University), and Kim Dae-ji, former Commissioner of the National Tax Service (Advisor at BnH Tax Firm), as well as Kim Young-jun, a professor at Korea University’s Graduate School of Technology Management, have also been recruited as candidates for outside directors.

This personnel split and board restructuring at Kakao was led by Hwang Tae-seon, Head of the Group HR Strategy Office at Kakao’s CA Council. It is reported that Hwang, who joined Kakao in 2018 after stints at SKTelecom and SK Planet, has moved to recruit external experts to strengthen the company’s technical, policy, and financial capabilities in its AI business.

The appointment of former CTO Oh is seen as a strategic move to secure the technology and capital needed for global AI competition and to strengthen the board’s capacity to oversee large-scale investments and collaborations with Big Tech companies.

Former KTCorporation CTO Oh Seung-pil Has Experience with a 2.4 Trillion Won Partnership with Microsoft

According to industry sources on the 25th

,

Kakao plans to address the proposal for a corporate spin-off at an extraordinary general meeting of shareholders on December 17. The company is moving forward with a plan to reassign existing board members to the respective spun-off entities and to appoint additional external experts

,

including former CTO Oh

,

to Kakao AI.

Former CTO Oh previously worked at the National Aeronautics and Space Administration (NASA), Yahoo, and Microsoft (MS) before leading the digital divisions at Hyundai Card and Hyundai Commercial. He joined KTCorporation in 2023 as Chief Technology Officer (CTO), overseeing IT, R&D, and strategies for AI and digital transformation.

In particular, he was involved in establishing a strategic partnership with Microsoft worth approximately 2.4 trillion won. KTCorporation and Microsoft jointly pursued projects such as Korean AI models, cloud services, and AI and AX (AI Experience) businesses. However, controversies arose regarding the appropriateness of the contract terms and data sovereignty. Former CTO Oh left KTCorporation in March of this year.

Should Kakao AI collaborate with global Big Tech companies in the future, it will need to review complex conditions ranging from cloud and computing infrastructure to models, data, intellectual property rights, and revenue sharing; as such, former CTO Oh’s experience is expected to inform the board’s decision-making.

Big Tech Spins Off AI… Reducing ‘Parent Company Risk’ and Raising Capital

The decision to

spin off

Kakao

AI

into a separate legal entity is also part of a strategy to separate the massive burden of AI investment from the parent company and flexibly attract external capital.

Over the past five years, 85% of the board’s major decisions and 84% of internal investment reviews in the past year have involved affiliate companies. Through a spin-off, Kakao plans to create a structure where Kakao focuses on its KakaoTalk-centered platform, while Kakao AI concentrates its investments on AI technology, talent, and computing infrastructure.

SKTelecom’s 2021 spin-off of its telecommunications business from SKSQUARE’s semiconductor and ICT investment operations is also worth noting. The SK Group’s recent move to establish “SK Hyper” as a separate legal entity for its AI data center (AIDC) business and to utilize special-purpose companies (SPCs) by region can also be seen as part of a trend to diversify the risks of large-scale infrastructure investments and attract external capital.

Kakao AI, too, must prove its profitability while managing massive AI investment costs following the spin-off. The key will be how quickly it can secure partnerships with global Big Tech companies and attract financial investors (FIs), and whether it can translate these efforts into actual revenue and profits.

Concerns About a “Heavy” Board… CEO Leadership Must Be Ensured

The fact that former government officials—such as former Minister of Science and ICT Lim Hye-sook and former Commissioner of the National Tax Service Kim Dae-ji—are being mentioned as candidates for outside directors is interpreted as a move to bolster expertise in policy, regulation, taxation, and finance. As the AI business expands and large-scale investments and global contracts increase, the board’s role in assessing risks related to data, security, intellectual property, and regulation will inevitably grow.

However, as seen in the case of KTCorporation during the previous administration, since rapid decision-making and execution are key to the AI business, there are concerns that if the board becomes overly bloated or intervenes too deeply in management, it could constrain the CEO’s leadership and swift decision-making. Observers point out that, alongside a board with specialized expertise, a clear division of roles is essential to allow Jeong Shin-ah, CEO of Kakao AI, to lead the business.

Kakao is proceeding with a spin-off to separate its AI business into Kakao AI, with January 1 of next year set as the spin-off date. The split ratio is 0.36 for Kakao AI and 0.64 for Kakao X, and the scheduled dates for Kakao AI’s relisting and Kakao X’s re-listing are January 27 of next year.

The spin-off is just the starting point. Kakao AI must leverage the KakaoTalk user base to convert AI search, Agent AI, advertising, and commerce into actual revenue and profits. While receiving oversight and advice from external experts, creating a structure that allows CEO Jeong Shin-ah to invest and execute quickly is expected to determine the success or failure of the new AI subsidiary.