The South Korean platform market is undergoing a transformation centered around artificial intelligence (AI). With Upstage entering the platform business based on Daum, the competition among the three major players—Naver, Kakao, and Upstage—has intensified into a three-way race.
All three companies have developed their own large language models (LLMs) or integrated AI technologies across their platforms, but their competitive strengths vary significantly by sector. Naver leads in search, Kakao dominates the mobile ecosystem, and Upstage is recognized for its AI technology.
In the search sector, Naver is at the forefront. According to the IT industry on June 17, Naver has built the largest domestic platform by connecting various services such as blogs, cafes, maps, and shopping. Recently, it has expanded its generative AI search capabilities, including AI briefings and AI tabs, utilizing its proprietary LLM, HyperCLOVA X, thereby shifting the search experience to an AI-centric model. Naver's ability to link search results to shopping and content is also seen as a competitive advantage.
Upstage has established a differentiated competitive edge in AI technology. The preview version of its next-generation LLM, Solar Open2, scored 44.4 on the Artificial Analysis Intelligence Index (AAII), nearing the performance of ChatGPT 5 and Claude Sonnet 4.6.
Upstage is not limiting itself to AI model development; it is expanding into the platform business. The company plans to combine its AI agent platform, Timely, with Daum to transform the existing portal into an AI agent platform. This application of AI models directly to services and platforms is viewed as a unique strength.
Kakao remains unmatched in the mobile ecosystem. KakaoTalk boasts approximately 46 million monthly active users, making it a lifestyle platform used by nearly all smartphone users in South Korea. It integrates finance, mobility, content, and commerce into a single ecosystem. Recently, Kakao has incorporated its own AI model, Kanana, and collaborated with OpenAI to enhance AI features within KakaoTalk, expanding everyday AI services. Its close user engagement is considered a significant advantage for expanding AI services.
In commerce, Naver holds a competitive edge. Naver's AI shopping app, Naver Plus Store (Neplis), recorded 8.75 million monthly active users last month, surpassing 11th Street. Naver has secured a vast number of sellers and users centered around Neplis, enhancing its AI recommendation features using search data.
Kakao has established its competitiveness around relationship-based commerce with features like gifting and Talk Deals. While Upstage's direct commerce capabilities are still limited, it is working to expand purchasing recommendations and marketplace functionalities using AI agents.
In the content sector, both Naver and Kakao are strong players. Naver has built an ecosystem based on user-generated content (UGC) through webtoons, blogs, and cafes, while Kakao has secured various intellectual properties (IPs) through Kakao Entertainment, including webtoons, web novels, and music. Upstage faces the challenge of creating differentiated services by integrating existing content assets from Daum News, cafes, and Tistory with AI.
The competition among AI platforms is evolving as each company combines its existing strengths with AI. Naver focuses on search and shopping, Kakao on the mobile ecosystem, and Upstage on AI technology. The future success of these companies will depend on how quickly they can implement AI technologies into actual services and attract users.
* This article has been translated by AI.
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