The South Korean platform market is being reshaped around artificial intelligence (AI). With Upstage entering the scene based on Daum, the competition among AI platforms is evolving into a three-way race previously dominated by Naver and Kakao.
All three companies have developed their own large language models (LLMs) or integrated AI technologies across their platforms, but their competitive strengths vary significantly. Naver excels in search, Kakao leads in mobile ecosystems, and Upstage stands out in AI technology.
In the search arena, Naver is currently in the lead. According to the IT industry on June 17, Naver has built the largest domestic platform by connecting various services such as blogs, cafes, maps, and shopping. Recently, it has expanded its generative AI search capabilities, including AI briefings and AI tabs, utilizing its proprietary LLM, HyperCLOVA X, thereby transforming the search experience to be more AI-centric. Naver's ability to link search results to shopping and content is also seen as a competitive advantage.
Upstage has established a differentiated competitive edge in AI technology. The preview version of its next-generation LLM, Solar Open2, scored 44.4 points on the Artificial Analysis Intelligence Index (AAII), closely approaching the performance of ChatGPT 5 and Claude Sonnet 4.6.
Upstage is not limiting itself to AI model development; it is also expanding into platform business. It plans to combine its AI agent platform, Timely, with Daum to transform the existing portal into an AI agent platform. This direct application of AI models to services and platforms is viewed as a unique competitive strength.
In the mobile ecosystem, Kakao remains unmatched. KakaoTalk boasts approximately 46 million monthly active users, making it a daily platform for most smartphone users in South Korea. It connects finance, mobility, content, and commerce within a single ecosystem. Recently, Kakao has integrated its own AI model, Kanana, and collaborated with OpenAI to enhance AI functionalities within KakaoTalk, expanding AI services in daily life. Its close user engagement is considered a significant advantage for expanding AI services.
In commerce, Naver holds a competitive edge. Its AI shopping app, Naver Plus Store (Neplis), recorded 8.75 million monthly active users last month, surpassing 11st Street. Naver has secured a vast number of sellers and users around Neplis and is enhancing its AI recommendation features using search data.
Kakao has established its competitiveness around relationship commerce, focusing on features like gifting and Talk Deals. While Upstage's direct commerce capabilities are still limited, it is pushing to expand purchasing recommendations and marketplace functionalities using AI agents.
In the content sector, both Naver and Kakao are strong players. Naver has built an ecosystem based on user-generated content (UGC) such as webtoons, blogs, and cafes, while Kakao has secured various intellectual properties (IPs) through Kakao Entertainment, including webtoons, web novels, and music. Upstage faces the challenge of creating differentiated services by combining existing content assets from Daum, such as news, cafes, and Tistory, with AI.
The competition among AI platforms is unfolding as each company leverages its existing strengths in conjunction with AI. Naver focuses on search and shopping, Kakao on the mobile ecosystem, and Upstage on AI technology. The future success of these companies will depend on how quickly they can implement AI technologies into actual services and attract users.
* This article has been translated by AI.
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