Naver CEO Choi Soo-yeon has lauded the emergence of Chinese artificial intelligence service DeepSeek, calling it an “innovative milestone” that proves how latecomers can challenge industry leaders with relatively small-scale investments.
During Friday's earnings call for the October-December 2024 period, the Korean tech giant chief reaffirmed the company’s commitment to narrowing the technology gap with leading AI firms amid rising competitive intensity with the advent of DeepSeek.
“We are dedicated to strengthening multimodal capabilities and inference performance to ensure we do not lag behind industry leaders,” she said. "At the same time, we will continue to explore various cost-efficient measures."
The CEO elaborated on Naver’s AI strategy by juxtaposing it with approaches from industry peers.
“While some rivals are aggressively expanding AI capabilities to pioneer new markets, our goal with HyperClova X is to optimize model efficiency and speed for Naver's ecosystem. We plan to roll out an update for our flagship model this month and demonstrate tangible results in multimodal applications, including voice, image and video, within the year."
HyperClova X, the latest edition of HyperClova, which was launched in 2021, is an upgraded version of the hyperscale AI platform tailored for the Korean language. It was developed to keep up with the ChatGPT-fueled global competition for linguistic AI.
Despite the company’s focus on internal AI development, Choi said the IT giant is open to partnerships with global Big Tech firms and other AI models. She also hinted that there are also ongoing discussions with them.
Choi emphasized that rather than causing a fundamental shift, recent developments have accelerated Naver’s AI evolution.
"Owning our proprietary AI models gives us the flexibility to strategically consider external large language model integration. We anticipate that AI-driven service competition, particularly in our domain, will intensify and accelerate,” the CEO said.
Additionally, she underscored Naver's competitive advantage in AI-enabled services. "As one of the leading internet platforms with the most extensive repository of high-quality data and AI-driven service integrations, Naver is well-positioned to leverage these shifts. These developments will further accelerate our business expansion,” Choi said.
In its 2024 earnings report released earlier in the day, Naver said it had achieved a historic milestone by surpassing 10 trillion won ($6.91 billion) in annual revenue for the first time among domestic internet companies.
The company reported a total revenue of 10.74 trillion won in 2024, up 11 percent from a year earlier. Annual operating profit surged by 32.9 percent on-year to 1.98 trillion won.
Naver had initially crossed the 5 trillion won revenue threshold in 2018 and has since accelerated its business expansion, particularly in new ventures, to double revenue within six years.
For the fourth quarter alone, Naver recorded 2.89 trillion won in revenue, up 13.7 percent from a year ago. Operating profit for the quarter reached 542 billion won, a 33.7 percent increase from a year earlier.
These figures exceeded the market consensus of 2.8 trillion won in revenue and 529.4 billion in operating profit compiled by financial data provider FnGuide.
Naver’s impressive annual performance was driven by balanced growth across all business sectors, with each quarter marking record-breaking achievements.
Breaking down the October-December period performance by segment, its mainstay search platform unit saw sales grow 14.7 percent on-year to 1.06 trillion won amid efforts to strengthen its platform's competitiveness.
Sales from the commerce unit rose 17.4 percent on-year to 775.1 billion won and revenue from the financial technology unit improved 12.6 percent on-year to 400.9 billion won.
The content unit saw its revenue inch up 0.2 percent on-year to 467.3 billion won and sales from the cloud business jump 41.1 percent on-year to 177.6 billion won.
In a separate disclosure, Naver announced that its founder, Lee Hae-jin, is set to return as a board member.
If approved at the upcoming shareholders meeting next month, Lee will reclaim the position as chair of the board after a seven-year hiatus, having stepped down in 2017.
yeeun@heraldcorp.com
