Since the launch of the Lee Jae-myung government, the stock prices of Naver and Kakao have been soaring day after day. The expectation has grown that the Lee Jae-myung government, which has pledged to strengthen 'Sovereign (national) AI,' will introduce support measures for Naver and Kakao, the representative corporations of AI in the country. However, there are also voices cautioning against the rapid stock price increase, as both companies have yet to deliver concrete results related to AI projects.
According to the Korea Exchange on the 25th, the closing price of Naver's stock the previous day was 290,500 won, reflecting a 56% increase from 186,200 won on the 4th, the day the Lee Jae-myung government was launched. The previous day's stock price of Kakao was 70,400 won, up 69.4% from 41,550 won on the 4th.
What could be the reason for the sudden surge in the stock prices of the two companies, which had once fallen to the status of 'ugly ducklings' due to their inability to achieve results in the face of foreign AI companies after the emergence of 'ChatGPT'? Analysts suggest that the expectations have increased because the Lee Jae-myung government, which announced a plan for 100 trillion won in AI investments as part of its presidential campaign, is likely to introduce support measures for domestic IT corporations like Naver and Kakao to strengthen Sovereign AI.
In the case of Naver, on the 15th, Lee Jae-myung appointed Jung Hak-joo, former head of Naver Cloud AI Innovation Center, as the inaugural chief of AI future planning. On the 23rd, Han Seong-suk, former CEO of Naver, was named as Minister of Small and Medium Enterprises and Startups, showcasing the benefits that Naver is reaping from the launch of the Lee Jae-myung government.
Kakao's stock price rose sharply thanks to the anticipation surrounding the introduction of 'Korean won stablecoin,' a pledge from the last presidential election, which has garnered attention for its affiliate Kakao Pay. The introduction of the Korean won stablecoin means officially issuing and using virtual assets (cryptocurrencies) tied to the Korean won (KRW). A stablecoin requires sufficient collateral assets, which are fulfilled by prepaid recharge funds. Since prepaid recharge funds represent customers' actual deposits, using them as a reserve for stablecoins allows for stable issuance and redemption.
Kakao Pay holds the largest amount of prepaid recharge funds among domestic corporations, making it a strong contender as a provider of the Korean won stablecoin. As of the first quarter of this year, Kakao Pay's prepaid recharge funds amounted to 591.9 billion won, the highest, followed by Naver Pay with 157.6 billion won and Toss with 137.5 billion won.
The key going forward is whether the upward momentum in the stock prices of both companies can be maintained. Despite the lack of significant changes in business aspects this month, concerns have been raised that the current stock prices are merely reflecting heightened expectations. There are also concerns about a possible bubble, suggesting that if the two companies fail to produce clear results in their AI businesses, their stock prices could collapse in an instant.
Kim Jin-hwan, a professor at Stanford University in the U.S., remarked, "The sudden surge in stock prices of Naver and Kakao can be viewed as a reflection of market expectations towards government policies, but in the long run, the backing of AI technology capabilities and business results is essential. In the fiercely competitive global AI landscape, it is not easy to maintain stock prices solely based on expectations, and without substantial innovation, it will be difficult to break free from reliance on foreign AI." He added, "Although U.S. big-tech companies initially faced 'bubble controversies,' they have demonstrated their technological prowess and business results over the past 5 to 10 years that have surpassed those concerns. If Naver and Kakao can translate current expectations into tangible AI innovations, there remains potential for further increases in their stock prices."
Meanwhile, since the return of Lee Hae-jin as chairman in March this year, Naver has been pushing to integrate AI technologies into its services, including shopping, search, news, and webtoons. It is also expanding into the global B2B (business-to-business) market in countries like Morocco, Thailand, and Saudi Arabia using its super-large AI model HyperClovaX. Kakao is pursuing AI projects in partnership with OpenAI. In the first quarter of this year, it launched a beta service called "AI Mate Shopping" as a KakaoTalk channel and unveiled a beta version of its conversational AI service "Kanana" last month.