South Korea’s Naver Corp. and Japan’s SoftBank Corp. are poised to renegotiate their stakes in A Holdings, their joint venture which oversees LY Corp., the operator of Japan’s popular messaging app Line and Yahoo Japan. This discussion is triggered by the Japanese Ministry of Internal Affairs and Communications’ directive for LY Corp. to diminish its reliance on Naver, following concerns over cybersecurity vulnerabilities evidenced by recent data breaches.
The strategic dialogue, involving top executives including Naver’s CEO Choi Soo-yeon, an experienced M&A lawyer, will explore the potential reduction of Naver’s 50% stake in A Holdings. This move aligns with Japan’s broader initiative to tighten control over foreign tech entities amidst escalating global cybersecurity threats and the rise of generative artificial intelligence technologies.
The Japanese government is also advancing legislation that could impose significant penalties on foreign tech giants that fail to adhere to new regulatory standards, including those governing app stores and internet browsers. This proposed regulatory framework aims to bolster Japan’s technological sovereignty and mitigate cybersecurity risks.
Amid these developments, there is an undercurrent of concern within South Korea’s tech community about Japan’s aggressive push to foster domestic AI capabilities, which could potentially disrupt the balance in regional tech leadership. This situation unfolds as global dynamics shift, with various countries instituting protective measures to secure their technological infrastructures and promote local enterprises in the competitive AI landscape.
