Naver and SoftBank in Talks to Jointly Set up AI Company

Naver is planning to establish an artificial intelligence (AI) company in partnership with Softbank of Japan. Naver is likely to provide AI technology and human resources, while Softbank is highly likely to provide capital and global networks.

Naver and Softbank have started negotiations to create an AI company. Naver is considering various measures such as spinning off Naver Clova CIC or establishing a joint venture company. Naver disclosed such ideas at an online briefing session held for Clova CIC employees on Oct. 14. Clova CIC is an organization that is in charge of Naver’s AI research, planning, development and operation.

Softbank Group chairman Masayoshi Son is also said to have shown strong will to establish an AI company. Softbank’s investment in the AI company may eclipse its investment in Coupang (three trillion won) or Yanolja (two trillion won).

The proposed AI company is the second cooperation project promoted by Naver global investment officer (GIO) Lee Hae-jin and SoftBank chairman Son. The first is Z Holdings, which was launched in March by integrating Naver’s LINE and SoftBank’s Yahoo Japan. Z Holdings was aimed at keeping U.S. and Chinese IT giants in check. The planned AI alliance is intended to secure global leadership in AI.

Industry insiders believe that the key is how much investment Clova CIC will attract from SoftBank and other investors, as it costs a huge amount of money to develop AI. If Clova CIC becomes independent to cooperate with Softbank, it will be Naver’s third spin-off after Naver Webtoon and Naver Financial.

Clova CIC plays a key role in Naver's AI technology research and development. The company developed Advanced AI technologies such as speech recognition, voice synthesis, optical character reading (OCR), image recognition, machine learning (ML) and natural language processing (NLP). Its technologies have been applied to the products and services of Naver and LINE.

Industry analysts say that Clova CIC is virtually the only organization in Korea that has the capability to compete with big U.S. tech giants such as Google, Amazon and Facebook in the AI field.