China Approval for Bunge's Viterra Deal Comes With Crop Demands
The green light from Beijing, announced by Bunge late last week, was the last major hurdle to the conclusion of the $8.2 billion deal. Still, a statement from the country's State Administration for Market Regulation outlined the large share of soybean, barley and rapeseed trade with one of the world's top buyers that the combined company will control, which risks limiting competition.
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Forbes
11 minutes ago
- Forbes
Korean Internet Giant Kakao Teams With OpenAI To Jumpstart Growth
S triding purposefully across the stage at a packed media briefing held in Seoul in early February, Shina Chung, CEO of Korean internet giant Kakao, leaned in to greet OpenAI cofounder Sam Altman. After six months of negotiations, the two companies had just sealed a partnership that would give Kakao (market cap: $20 billion) access to the American AI titan's powerful technology. As Chung declared on stage, it could potentially turn 'all imaginable AI-era services into reality'—and give Kakao a fighting chance to leapfrog the competition. With OpenAI's help, Kakao hopes to realize its ambitions of being at the forefront of providing hyper-personalized services to the 49 million users of its ubiquitous superapp KakaoTalk, which equals about 94% of the country's population. Chung is targeting a November rollout of so-called AI agents—next generation virtual assistants that can go beyond answering basic questions to making decisions and even taking actions on behalf of users. Shina Chung, CEO of Kakao Jaehyun Kim For Forbes ASIA 'We needed a partner we could trust, especially one who leads the field in performance and innovation,' says Chung in an exclusive interview with Forbes Asia at Kakao's office in Pangyo, South Korea's Silicon Valley, just south of Seoul. 'We had the same philosophy.' For Kakao and its first woman CEO, the OpenAI alliance could be nothing less than a game-changer. Since taking the top job in March 2024, Chung's biggest challenge is to steer the company through the longest stretch of sluggish sales in its 15-year history. The 50-year-old Chung, who featured on Forbes Asia 's Power Businesswomen list last year, is betting that going all-in on AI will be a catalyst for growth. 'We are now preparing to significantly change KakaoTalk so that AI can penetrate its many services,' she says. The collaboration isn't a one-way deal. For OpenAI, it offers an opportunity to further its global ambitions by providing access to one of the world's most tech-savvy markets, which has the highest number of paying subscribers outside the U.S. for ChatGPT, its revolutionary chatbot. 'We're excited to bring advanced AI to Kakao's millions of users and work together to integrate our technology into services that transform how Kakao's users communicate and connect,' says OpenAI's chief product officer Kevin Weil by email. Just the day before the glad-handing event with Chung, Altman was in Tokyo with SoftBank's billionaire founder Masayoshi Son, announcing a new joint venture to market AI services to Japanese companies. SoftBank recently led a $40 billion funding round in OpenAI and the two companies are also partners in the $500 billion Stargate project to build AI data centers in the U.S. Shina Chung and Sam Altman are hoping for a win-win. Courtesy of Kakao Corp. It's a critical turning point for Kakao. The company's business is dependent on the Korean market—compared with blue-chip stalwarts like Samsung and Hyundai whose fortunes are determined by global exports—which faces a deepening economic slump. The country's GDP contracted by 0.2% in the first quarter amid the threat of a global trade war, weak consumer spending and months of political turmoil. In 2024 the company narrowed its net loss to 161.9 billion won ($119.4 million) from 1.82 trillion won the previous year, on a 4% uptick in revenue to 7.87 trillion won. The alliance with OpenAI could yield as much as double-digit sales growth within two years, according to Kakao as it transforms itself into a company where AI is at the core of its operations and services. One-Stop Shop The Korean internet giant offers everything from taxi-hailing to online banking. Percentages have been rounded. Source: Kakao Chung will need to act fast to hard-bake the fast-evolving tech into Kakao's businesses, which run the gamut of everyday activities, from messaging and online banking to music streaming and taxi-hailing, to gain an edge on its chief rival Naver, South Korea's biggest internet company by revenue (2024: 10.73 trillion won). The Seongnam-based firm is widely seen as being a step ahead of Kakao in the AI race with its large language model (LLM) HyperClova X, launched in 2023 and tailored for the Korean language and culture. Also closing in is a fast-growing crop of local AI native startups. 'The AI agent will automatically do the work for you and life will be so much better even without knowing what AI is.' Already Chung has begun laying the foundation. In mid-June, the company announced a 600-billion-won investment to build a 92,000-square-meter AI data center in Namyangju city, about 25 kilometers from Seoul. The data center—its second after last year's launch of a facility in Ansan with 6 billion gigabytes of data storage capacity—will break ground in 2026 and is slated to open by 2029. B y leveraging OpenAI's LLMs, which undergird ChatGPT, Kakao is developing a suite of services with the aim of getting users to increase their time on the superapp—and spend more money while using it. 'We saw diminishing returns trying to compete in the benchmark tests for the most powerful AI models, so we decided on a more practical approach seeking cost efficiency,' says Chung. OpenAI-powered AI agents have the potential to autonomously plan and take action across Kakao's digital ecosystem, with limited human direction; for example, make a restaurant booking on behalf of a KakaoTalk user, add a calendar reminder, book a taxi and pay for a meal. That stickiness, Chung believes, will result in more ads—one of Kakao's main revenue drivers—reaching users across its chats and channels. 'AI enhances our core business, especially advertising and commerce,' she says. Advertising accounted for 15% of group revenue last year while its commerce unit contributed 11%. Kakao earns commissions of up to 8% per transaction for gifts sent between KakaoTalk users. An average of 600,000 gifts (from chocolate to vitamins to cosmetics and clothes) are exchanged daily, the company says, in the form of mobile vouchers that can be redeemed at participating restaurants and retailers or ordered from the platform's gift shop. 'The advertising business, which currently operates as the main cash cow of internet companies, will undergo dynamic changes with the introduction of AI-based services,' says Jingu Kim, a Seoul-based analyst at Kiwoom Securities. He predicts there will be a rapid uptake in B2C-based subscription plans that include AI agent services. 'In this process, we expect that Kakao will be able to secure sustainable growth and level up its corporate value through its collaboration with OpenAI.' A Kakao Friends store selling character merchandise such as Ryan (the lion) and the radish-in-rabbit clothing Muzi. Getty Images In a dry run with OpenAI's tech in early May, Kakao launched a new standalone messaging app called Kanana for closed beta testing that features AI agents Kana and Nana. Powered by OpenAI's GPT and its own small language model (SLM), it can assist users in personal and group chats by answering questions, summarizing group conversations, setting meeting times for events and sharing updates. Kakao declined to say how much it has spent but discloses that some 400 employees, or about 10% of its workforce, are working on AI projects. 'For everyday-use cases, we don't need to [invest in] a large language model,' says Chung, as that can cost hundreds of millions of dollars and take years to develop. Besides being cheaper to train and run, SLMs are safer to use as they're less likely to provide incorrect answers to user queries, known as hallucinations, while also being more secure, she adds. It doesn't require a network connection to a cloud, which is vulnerable to server breaches. Kakao will use its SLM to perform simple tasks, while relying on OpenAI's powerful LLM to manage more complex, multistep and linked applications across Kakao's ecosystem, says Chung. It's the same strategy used by Apple: simple queries are answered by Siri, powered by Apple's in-house Apple Intelligence LLM, and more complex questions are directed to ChatGPT. 'Everyone was defaulting to GPUs for AI, but does it make sense to use the most expensive chips for small inference tasks?' explains Chung. A taxi operated by Korea Mobility. © 2021 Bloomberg Finance LP The company expects to complete Kanana's closed beta testing in November, around the same time that it plans to launch the OpenAI-Kakao AI agent. 'The virtual assistant will automatically do the work for you and life will be so much better even without knowing what AI is,' says Chung. 'Because now you need to find which app to use, go to the app, take action. With agentic AI it will be seamless.' A longside her tech focus, Chung has been striving to make Kakao leaner. This has involved shedding non-core businesses—the number of affiliates has dropped by a fifth over the past two years to 115 from 147, the company says. Then there's the planned spin-off of Daum, the country's second-largest portal site by daily visitors, which Kakao acquired in 2014. This will allow Chung to concentrate on juicing up other parts of Kakao's portfolio, both domestic and overseas, and in particular its banking, entertainment and digital healthcare services. In June, a joint venture between its internet banking arm Kakao Bank and Thai financial group SCBX, which controls Siam Commercial Bank, received approval from the Thai government to establish a virtual bank in Thailand, making it the first Korean bank to operate in the country in 25 years. Earlier this year Kakao Entertainment announced the global launch of its fan-community app Berriz as Kakao Healthcare forged a partnership with Seoul-based elderly-care startup Caring and expanded into Japan. Flat Line Kakao's quarterly revenue has seen little movement in the past two years. Source: Kakao K akao's sales started to lose steam after peaking at 2 trillion won in the third quarter of 2023. With the company being under pressure to boost revenue and earnings, founder Kim Beom-su embarked on an aggressive expansion of its entertainment portfolio. Kim, who has a 24% stake in Kakao and a net worth of $5.1 billion, made the fateful call to get into a bidding war for K-pop agency SM Entertainment with Korean billionaire Bang Si-hyuk's Hybe, manager of boy band sensation BTS. While Kakao was ultimately successful, snatching a 35% stake in SM for 1.3 trillion won in March 2023, prosecutors alleged that Kim, long-hailed as an internet pioneer, had manipulated SM's stock price to ward off Hybe. Kim, who denied any wrongdoing, was arrested in July 2024 and is currently out on bail awaiting trial. In a statement to Kakao employees at the time, he said: 'The allegations are not true. I have never instructed or condoned any illegal acts.' A crisis 'can be an opportunity for renewal.' During the takeover battle for SM, Chung was running venture capital arm Kakao Ventures and also had a board seat at Kakao. She had made a name for herself as a VC investor with a portfolio that produced four unicorns. To steady the ship, Kakao's board enlisted Chung as CEO last year. 'I saw that period as a turning point for Kakao,' she recalls, adding that a crisis 'can be an opportunity for renewal.' Chung's forward-looking approach was honed over a 25-year career that has included roles at Boston Consulting Group, eBay and Kakao rival Naver. Chung studied French literature at Yonsei University in Seoul (not because she particularly liked French lit, she says, but because back then it was the subject du jour among brainy female students), followed by a master's degree in marketing from the same college and an M.B.A. from the University of Michigan. Photo by Jaehyun Kim for Forbes Asia In 2014, she joined Kakao Ventures as a partner, becoming its CEO four years later. Her decade-long stint at the VC arm taught her how to deploy 'my imagination with curiosity,' she says. 'For example, the market for most early-stage investments wasn't there yet, so I needed to imagine it.' She did just that with Kakao Ventures' early backing of South Korean AI chipmaker Rebellions, contributing 2 billion won of the 5.5 billion won in seed funding in 2020. Last December, Rebellions became the country's first AI chip unicorn, valued at 1.3 trillion won, equivalent to $1 billion at the time, after it merged with a rival chipmaker owned by Korean billionaire Chey Tae-won's SK Group (Kakao retains a stake). It's not a given that Chung's big tech bet will pay off. There are concerns in the industry that AI agents are more hype than substance, and could struggle to gain traction with users, much like Facebook's metaverse, which saw the social media giant rebrand itself Meta and pour tens of billions of dollars into a virtual world project that has so far flopped. Alongside OpenAI, tech firms Google, Anthropic and Salesforce have debuted AI agents for consumers and businesses but they are nowhere near mainstream. OpenAI is also restricted in its use of personal data collected from Kanana agents, per a government review requested by Kakao over concerns about sharing personal information such as bank account and credit card details. Chat data must be stored in a database controlled by Kakao and can't be used by OpenAI for commercial purposes, the Personal Information Protection Commission ruled. Kakao Pay is accepted at stores throughout South Korea. © 2021 Bloomberg Finance LP For now, a campaign promise by South Korea's new president Lee Jae-myung to invest 100 trillion won in AI and introduce measures to support the country's internet giants has led Kakao's previously moribund shares to surge over 85% in the past two months. Investors also piled in over a proposed law that would allow companies in South Korea to issue won stablecoins, with Kakao's listed payments platform Kakao Pay seen as one of the main beneficiaries. Kakao Pay shares rocketed before correcting sharply recently after regulators highlighted the risks associated with stablecoins. Chung's shown the stamina and smarts to meet such challenges and has a secret weapon up her sleeve: imagination. 'It will work very well,' she says. 'Especially when new eras come.' More From Forbes Forbes Korea's Kakao Teams Up With OpenAI To Develop AI Products By Zinnia Lee Forbes Korean Webtoon Publisher Kakao On The Industry's Anti-Piracy Crusade By Rob Salkowitz Forbes South Korea's AI Chip Champion Is Poised To Carve Out Global Niche By John Kang
Bloomberg
18 minutes ago
- Bloomberg
Local Funds Double Down on Indian Stocks With $40 Billion Buying
Domestic institutional investors are continuing to power India's equity markets, with net purchases so far in 2025 inching toward last year's record influx. Local funds have already bought a net amount of more than $40 billion in the first half, compared with nearly $63 billion in 2024. In contrast, global investors have pulled about $8 billion from Indian equities this year, according to data compiled by Bloomberg.
Bloomberg
20 minutes ago
- Bloomberg
Korea's Reform Drive Gets a Boost as Lawmakers Vote for Changes
South Korea's ambitious plan to improve corporate governance standards got a boost after the parliament voted to approve changes that will help protect the rights of minority shareholders. The revisions to the so-called commercial code include making board members legally accountable to all shareholders, instead of catering largely only to those with significant stakes — such as the founding families of the nation's many conglomerates. Another key change is to limit the voting rights of the largest shareholders and related parties to 3% when appointing the members of an audit committee.
