KT, South Korea’s leading telecommunications company, announced that it would join Microsoft in investing 2.4 trillion won ($1.8 billion) in developing an artificial intelligence (AI) model tailored for Korea. At a press conference, KT CEO Kim Young Shub shared details of the partnership, which he has been working on with Microsoft CEO Satya Nadella since late last year. KT and Microsoft signed a strategic partnership last month.
The two companies will jointly invest 2.4 trillion won in AI over the next five years, aiming to generate 4.6 trillion won in cumulative sales from AI-related business during this period. Roughly half of the investment will be allocated to infrastructure such as internet data centers (IDCs) and graphics processing units (GPUs). The other half will be used to launch a Korea-specific AI cloud platform and associated services.
KT has placed its future on its collaboration with MS, with telecom sales growth stagnating and corporate value declining, believing that failure to enter the AI market could lead to its downfall. The press conference, originally scheduled for the first of last month to mark the first anniversary of Kim’s tenure, was postponed to provide more detailed explanations of the MS collaboration. Jo Won-woo, CEO of Microsoft Korea, also attended the event.
“The days of telecommunications companies relying solely on communications for growth are over, and even the telecom network itself will become obsolete without innovation through AI”, Kim said during the press conference.
He emphasized his plan to transform KT into an AI-driven communication technology (AICT) company. With telecom sales stagnating and corporate value declining, KT sees its future tied to AI and views this partnership with Microsoft as a crucial step toward entering the AI market to ensure long-term competitiveness in an ever-evolving market.
“The race to build the largest, most scalable AI model is already over, and we can’t compete with big tech companies that are investing billions of dollars into AI”, Kim said, explaining KT’s decision to partner with Microsoft. Instead of competing with these companies by focusing on super-scale AI development, KT will seek growth by helping customers adopt AI solutions. “The market has shifted from a focus on price-performance to who can deliver customer solutions the fastest”, Kim said, adding that working with Microsoft allows KT to accelerate product development.
KT plans to pilot a Korea-specific public cloud service next month, with an official launch planned for the first quarter of next year. A KT official explained, “Many public and financial institutions currently use private cloud services for security reasons, which limits their ability to incorporate third-party tools like Salesforce’s data analysis solutions.” To address this issue, KT aims to introduce a cloud platform that combines robust security and flexibility by leveraging Microsoft’s technology. “KT will also help customize the cloud to meet Korea’s regulatory and security requirements”.