Q1 operating profit rises 9.5% to $254 million
By Baek Byung-yeul
Naver will launch a hyperscale artificial intelligence (AI) service called HyperCLOVA X this summer, taking a cue from the explosive popularity of generative AI services like OpenAI’s ChatGPT, according to its CEO, Monday.
“To create a competitive domestic hyperscale AI ecosystem, we will launch the next generation of hyperscale AI HyperCLOVA X this summer,” Choi Soo-yeon, CEO of Naver, told investors during a conference call after releasing the company’s first-quarter earnings results.
“HyperCLOVA X is the world’s third-largest Korean language learning model and the first in Korea,” the CEO said. “HyperCLOVA X delivers high performance at more than a quarter of the cost of other service providers, while still being able to understand images and speech. It can answer questions with calculators, maps and other functional APIs (application programming interfaces).”
Naver has said it has been developing its own generative AI service. While ChatGPT and other services developed by Big Tech companies are gaining attention worldwide, Naver thinks it can become the best AI service provider for Korean users because there are still difficulties in commercializing localized services due to the reliability of data and cost issues.
Under the plan, NAVER will apply HyperCLOVA X across its services, including its search engine
“On the search side, we plan to conduct an internal beta test of a generative AI search service within the first half of this year that will support optimized searches for each user. We plan to launch the upgraded model as a service for users in the second half of the year,” Choi said.
The company will also introduce an AI service for business-to-business (B2B) use. It will introduce customized domestic B2B services that address data protection issues. In Japan, Naver will launch B2B services within this year that incorporate HyperCLOVA X into production tools such as Line Works and Naver Works.
In the first quarter, the company saw sales jump 23.6 percent year-on-year to 2.28 trillion won ($1.7 billion), while operating profit rose 9.5 percent to 330.5 billion won.
Naver said it posted a better operating profit than in the first quarter of last year, thanks to its solid performance in the e-commerce sector, including the return to profitability of Poshmark, a U.S. marketplace fashion company it acquired in January.
Naver’s main business, selling advertising through search, has shown solid growth despite the global economic downturn. The search platform generated 851.8 billion won in sales, up 0.2 percent year-on-year. Display advertising decreased 13.1 percent year-on-year, but search advertising grew 5.3 percent year-on-year in the first quarter.
