SK Networks is accelerating its transition to an artificial intelligence (AI)-focused business model. The company is moving away from its traditional operations in car rentals and telecommunications distribution, shifting towards a significant restructuring centered on AI, data, and robotics. As it marks the third year of its transformation into an AI company, market interest is growing as some investment results become visible.
According to Mirae Asset Securities on June 12, SK Networks has emerged as the most purchased stock among the top 1% of investors over the past month, reflecting optimism about its shift to AI and expectations for improved performance.
Over the past two years, the company has actively pursued its transition to an AI-centric business. Since the appointment of CEO Lee Ho-jung in 2023, SK Networks has sold SK Rent-a-Car, spun off Glowaide and SK Speedmate, and restructured its kitchen appliance business under SK Magic. This strategy aims to reduce the share of traditional businesses that once fueled growth and concentrate capital and resources on future growth areas like AI and robotics.
A notable investment has been made in the domestic generative AI company Upstage. Following its initial investment in 2024, SK Networks has increased its stake to 12.9% through additional investments and the exercise of call options. Analysts suggest this move goes beyond mere financial investment, indicating a strategic partnership. Upstage's AI technology is expected to be integrated into SK Networks' operations and used to explore new business models.
The company has also established a new AI organization. In 2024, SK Networks set up the 'Phoenix Lab' in Silicon Valley to develop AI technologies. This lab will collaborate with SK Networks and its subsidiaries to discover, invest in, and commercialize AI technologies. Last year, it launched a specialized AI solution for the pharmaceutical industry called 'Cheiron' and has been targeting the global market. Additionally, SK Networks secured $4 million in investments from global AI investors.
The restructuring of its subsidiaries is also progressing. SK Magic changed its name to SK Intelix last year, signaling its transition to an AI and robotics company. This change reflects its intention to evolve beyond product sales and rentals into an AI-based service provider. Notably, it introduced an AI healthcare platform called 'Namux' last year and is now actively pursuing a wellness robot business. Recently, it signed a partnership agreement with Tower PMC, a premium residential management company, to expand the supply of wellness robots and AI-based home appliances in upscale residential areas in Gangnam and Seocho.
Data operations are another key component of SK Networks' AI strategy. The company is nurturing Enco as a data specialist following its acquisition in 2023. Enco possesses competitive capabilities in enterprise data management and governance, essential for building the data infrastructure necessary for the expansion of AI services. As competition in AI model performance ultimately leads to a data competition, Enco's role is expected to grow.
Recent results are becoming increasingly evident. In the first quarter of this year, SK Networks reported consolidated revenue of 1.7434 trillion won and operating profit of 33.4 billion won, marking increases of 6.5% and 102.4%, respectively, compared to the same period last year. The expansion of SK Intelix's subscription business and improved performance at Walkerhill contributed to these results. Notably, net profit surged to 42.7 billion won, significantly improving from the previous year.
An industry insider noted, "The current results reflect gains from the appreciation of investment assets, and establishing a stable revenue model in new businesses like AI and robotics will be a future challenge. In particular, the performance of wellness robots, which SK Intelix is focusing on, is expected to draw attention."
* This article has been translated by AI.
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