Kakao signed a memorandum of understanding with Gyeonggi Province on Friday to develop a second proprietary data center in Namyangju City, marking another substantial infrastructure investment as the Korean internet giant positions itself for artificial intelligence competition.
The move follows Kakao’s February partnership with OpenAI to integrate ChatGPT technology into KakaoTalk, its dominant messaging platform that serves 97% of South Korea’s domestic market. The company frames the new facility, tentatively called “Digital Hub,” as essential for evolving KakaoTalk into a super app while strengthening AI capabilities.
Kakao’s infrastructure push stems from a painful lesson learned in October 2022, when a fire at a third-party SK C&C data center caused a five-day service disruption that CEO Chung Shin-a described as “trauma.” The company’s first proprietary data center in Ansan, which cost 460 billion won ($334 million) and became operational in January, was built specifically to prevent such outages.
The Namyangju project signals Kakao’s determination to reduce dependence on external providers while chasing rival Naver in the AI race. However, analysts suggest Kakao has lagged behind Naver in AI development despite its messaging app dominance. Friday’s ceremony included Governor Kim Dong-yeon, Mayor Ju Gwang-deok, Korea Land and Housing Corp. President Lee Han-jun, and CEO Jung Sin-a, though financial details remain undisclosed.
The infrastructure expansion reflects broader Korean government ambitions, including plans for a national AI computing center worth up to 2 trillion won ($1.4 billion).
